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Wednesday, August 20, 2014

CFPB Updates Guidance on Mortgage Servicing Transfers

The Consumer Financial Protection Bureau (CFPB) yesterday issued a compliance bulletin to residential mortgage servicers and subservicers regarding potential risks to consumers with transfers of residential mortgage servicing rights. The bulletin warns mortgage companies about legal obligations to protect consumers before, during and after loan transfers between mortgage servicers.
 
This compliance bulletin replaces the CFPB Bulletin 2013-01 (Mortgage Servicing Transfers) that was released in February 2013. The updated bulletin includes adjustments to the ability to repay/QM provisions of the Dodd-Frank Act, and to the dollar amount thresholds in Regulation Z regarding the CARD Act and HOEPA.
 
The CFPB is required to calculate annually the dollar amounts for several provisions in Regulation Z, based on the annual percentage change reflected in the Consumer Price Index.

“[F]or the purpose of a creditor’s determination of a consumer’s ability to repay a transaction secured by a dwelling, a covered transaction is not a qualified mortgage unless the transaction’s total points and fees do not exceed:
  • 3 percent of the total loan amount for a loan greater than or equal to $101,953;
  • $3,059 for a loan amount greater than or equal to $61,172 but less than $101,953;
  • 5 percent of the total loan amount for a loan greater than or equal to $20,391 but less than $61,172;
  • $1,020 for a loan amount greater than or equal to $12,744 but less than $20,391; and
  • 8 percent of the total loan amount for a loan amount less than $12,744.”
For the Card Act, “[t]he minimum interest charge disclosure thresholds will remain unchanged in 2015. The adjusted dollar amount for the penalty fees safe harbor in 2015 is $27 for a first late payment and $38 for each subsequent violation within the following six months.”
 
For HOEPA loans, “the adjusted total loan amount threshold is $20,391, effective January 1, 2015. The adjusted statutory fee trigger for HOPEA loans is $1,020 . . . .”
 
The ABIA has Task Forces of members that work on issues related to Qualified Mortgages and the CFPB's regulation of insurance products. If you are an ABIA member and would like to learn more about our Qualified Mortgage task Force or ABIA's work with CFPB to educate them about the bank-insurance industry or join either Task Force, please contact us and visit our website.