Compliance Blog

Written by Bernadette Clair, Senior Regulatory Compliance Counsel

Last Friday, the CFPB announced the availability of a new tool on its website to help consumers find local housing counseling agencies. In conjunction with that announcement, the CFPB also released an interpretive final rule, rule summary, and Bulletin 2013-13 providing instructions and guidance for generating the lists of housing counseling agencies that lenders will be required to provide applicants for federally-related mortgage loans effective January 10, 2014.

Buried in the CFPB’s 2013 HOEPA final rule, the requirement to provide applicants for federally-related mortgage loans with a written list of HUD-approved housing counseling agencies is implemented in Regulation X, Section 1024.20(a)(1). Under the rule, lenders can generally obtain the lists in one of two ways:

• Generating lists using a website maintained by the CFPB for this purpose; or
• Generating lists independently using the same HUD data that the CFPB uses on HUD-approved counseling agencies, in accordance with CFPB’s list instructions.

The CFPB’s new tool is available for lenders that choose to use the first option.

Lenders that choose the second option will want to review the additional instructions in the CFPB’s interpretive final rule.  In Bulletin 2013-13, the CFPB recognizes that some lenders using the second option may not be able to bring their systems into compliance in time for the rule’s January 10, 2014 effective date.  The CFPB discusses this issue and provides an interim procedure that lenders can use “in good faith” while they are building their systems.  From the Bulletin:

“Accordingly, while lenders are incorporating § 1024.20(a)(1)(ii) list instructions into their systems, they may direct borrowers to the Bureau’s housing counseling agency website to obtain a list of housing counselors, using the format and text suggested below, www.consumerfinance.gov/find-a-housing-counselor. These steps, if taken by lenders in good faith while they are building their systems or are working with vendors to build systems, would achieve the goals of the regulation and would not raise supervisory or enforcement concerns.  Following is the suggested text to be used for this interim procedure:

“Housing counseling agencies approved by the U.S. Department of Housing and Urban Development (HUD) can offer independent advice about whether a particular set of mortgage loan terms is a good fit based on your objectives and circumstances, often at little or no cost.

If you are interested in contacting a HUD-approved housing counseling agency in your area, you can visit the Consumer Financial Protection Bureau’s (CFPB) website, www.consumerfinance.gov/find-a-housing-counselor, and enter your zip code.

You can also access HUD’s housing counseling agency website via http://www.consumerfinance.gov/mortgagehelp/.

For additional assistance with locating a housing counseling agency, call the CFPB at 1-855-411-CFPB (2372).”

 See the interpretive final rule, summary, and bulletin for complete details.