Summer 2015 Federal Highlights

CFPB Issues Interpretive Rule on Homeownership Counseling Organizations Lists and High-Cost Mortgage Counseling

The Consumer Financial Protection Bureau (“CFPB”) issued an interpretive rule addressing the requirements under the Real Estate Settlement Procedures Act (“RESPA”) and the Truth In Lending Act (“TILA”) that lenders provide certain mortgage loan applicants with lists of certified homeownership counselors. It was effective April 21, 2015. The interpretive rule is available here: The rule restates guidance the CFPB issued in a 2013 interpretive rule and provides further guidance regarding the number of homeownership counselors that must appear on the list, the location of the counselors by zip code, the counselors’ contact information, other information that must accompany the list, and combining the list with other disclosures.

CFPB Reminds Creditors of Their Obligations Regarding Inclusion of Section 8 Housing Vouchers in Borrower’s Income

The Consumer Financial Protection Bureau (“CFPB”) issued a bulletin regarding the Section 8 Housing Choice Voucher Homeownership Program. A copy of the bulletin is available here:

Under the Section 8 Housing Choice Voucher Homeownership Program, eligible consumers receive monthly assistance payments to help cover housing expenses. According to the bulletin, some creditors are excluding or refusing to consider income from Section 8 payments as part of the mortgage loan application and underwriting process. The CFPB takes the position in the bulletin that this practice may violate the Equal Credit Opportunity Act and Regulation B.

VA Provides Guidance On HUD-1 Itemization Department of Veterans Affairs Circular 26-15-6

The Department of Veterans Affairs (“VA”) issued a circular relating to the VA’s requirements regarding documentation and itemization of certain charges listed on the HUD-1 Settlement Statement. The circular is effective for all loans closed on or after May 1, 2015. A copy of the circular and exhibits is available here:

Interagency Final Rule on Minimum Requirements for Appraisal Management Companies

The Federal Deposit Insurance Corporation (“FDIC”) and the Consumer Financial Protection Bureau (“CFPB”), along with several other regulatory agencies, issued a Final Rule implementing the requirements of the Dodd-Frank Act relating to registration and supervision of appraisal management companies (“AMCs”). The Final Rule is effective August 10, 2015. Federally regulated AMCs must comply with the minimum requirements for providing appraisal management services no later than twelve (12) months from the effective date of the Final Rule.

HUD Updates Settlement Certification Model Language and Posts Revised Instructions for Preparing Notes and Mortgages – FHA Info # 15-38

The Department of Housing and Urban Development (“HUD”) issued FHA Info # 15-38. A copy of the notice is available here:

As set forth in the notice, HUD has revised the Settlement Certification model language document. The Settlement Certification, formerly known as the Addendum to HUD-1 Settlement Statement, includes certifications from the buyer and seller that the only sources of funds for the transaction are the borrower’s down payment and the loans listed in the sales contract. Mortgagees must begin using the new model language for Title II forward mortgage applications received on or after August 1, 2015.

As set forth in the notice, HUD has also posted revised instructions for use when preparing a Title II forward note and mortgage.

HUD Releases Preview of FAQs for New Single Family Housing Policy Handbook 

The Department of Housing and Urban Development (“HUD”) released a preview of its responses to frequently asked questions regarding the new, consolidated Single Family Housing Handbook, which will become effective on September 14, 2015. 

Banking Agencies Revise Flood Insurance Regulations 

The Federal Deposit Insurance Corporation (“FDIC”), along with several other banking agencies, issued a Final Rule amending its regulations regarding loans secured by property in areas having special flood hazards. The Final Rule implements provisions of the Homeowner Flood Insurance Affordability Act of 2014 (“HFIAA”). Some provisions of the Final Rule are effective October 1, 2015, and some provisions are effective January 1, 2016.

Among other things, the Final Rule amends the FDIC’s regulations to require a lender, or servicer acting on the lender’s behalf, to escrow all premiums and fees for flood insurance required for loans secured by residential improved real estate or a mobile home unless the loan qualifies for certain exceptions, effective January 1, 2016.

The Final Rule also requires the lender to give notice of the requirement to escrow all premiums and fees for flood insurance with the Notice of Special Flood Hazards and Availability of Federal Disaster Relief Assistance. 

Agencies Issue Standards for Assessing Diversity Policies and Practices 

The Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, and other agencies have issued a policy statement establishing joint standards for assessing the diversity policies and practices of the entities they regulate. A copy of the statement is available here: Joint Policy Statement.

The statement sets forth the agencies’ standards for assessing organizational commitment to diversity and inclusion, workforce profile and employment practices, procurement and business practices – supplier diversity, practices to promote transparency of organizational diversity and inclusion, and entities’ self-assessment.

The statement clarifies that it does not impose new legal requirements or mandate specific actions by any regulated entity. Use of the standards is voluntary.

Fannie Mae Revises Selling Guide to Include TRID Form Requirements 

The Federal National Mortgage Association (“Fannie Mae”) has updated its Selling Guide to reflect its policies regarding the Loan Estimate and Closing Disclosure required under the TILA/RESPA Integrated Disclosures Rule (“TRID”). A copy of Fannie Mae’s announcement is available here.

USDA Increases Upfront Guarantee Fee for Single Family Housing Guaranteed Loan Program

The United States Department of Agriculture’s Rural Housing Service announced an increase in the upfront guarantee fee for the Single Family Housing Guaranteed Loan Program. Effective October 1, 2015, the upfront guarantee fee will increase from 2 percent of the loan amount to 2.75 percent of the loan amount.

FCC Releases Omnibus Declaratory Ruling and Order on TCPA                

The Federal Communications Commission (“FCC”) released an Omnibus Declaratory Ruling and Order (“Order”) addressing certain provisions of the Telephone Consumer Protection Act (“TCPA”) on July 10th, 2015. A copy of the Order, which the FCC adopted on June 18th, 2015, but did not release until July 10th, is available here: FCC Order 15-72.

Posted in Federal Highlights, Newsletters


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