Summer 2014 Federal Highlights

The Department of Veterans Affairs (VA) issued an interim final rule defining the types of VA loans that are “qualified mortgages” for purposes of the ability to repay requirements of TILA and Regulation Z.  The interim final rule is effective May 9, 2014.   The VA also issued FAQs regarding this rule.  Of particular significance, the FAQs provide that the VA will begin enforcement of these provisions on all loans for which applications are taken on or after June 1, 2014.

The USDA issued an announcement regarding the annual fee for single family guaranteed loans.  For single family guaranteed loan program loans obligated on or after October 1, 2014, both purchase and refinance transactions will be subject to (1) an upfront guarantee fee equal to 2 percent of the loan amount, and (2) an annual fee of 0.5 percent of the unpaid principal balance.

The CFPB  issued an interpretive rule to clarify the application of the ability-to-repay rule (“ATR rule”) to certain successors-in-interest.  The interpretive rule provides that where a successor-in-interest who has previously acquired title to a dwelling agrees to be added as obligor or substituted for the existing obligor on a consumer credit transaction secured by that dwelling, the creditor’s written acknowledgement of the successor as obligor is not subject to the ATR rule.

The CFPB issued guidance regarding mini-correspondent lenders and whether such entities are “brokers” or “lenders” for purposes of TILA and RESPA. The guidance includes a series of questions the CFPB will consider in making this determination.

The CFPB also released a proposed rule amending Regulation C (HMDA).  The proposed rule clarifies the institutions and loans subject to HMDA reporting, revises the data points required to be collected, and modifies reporting deadlines for certain institutions. Comments on the proposal must be submitted by October 22, 2014.

Posted in Federal Highlights, Newsletters


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