The CFPB issued guidance for lenders on how to comply with the new requirement to provide housing counseling agency information to mortgage loan applicants. Under the 2013 HOEPA Final Rule, which takes effect on January 10, 2014, lenders must provide applicants for federally-related mortgage loans with a written list of HUD-approved housing counseling agencies. To explain how lenders can comply with the rule, the CFPB provided instructions in an Interpretative Rule. They also issued a Guidance Bulletin outlining an interim path to compliance for lenders that will build their own lists.
Lenders can fulfill the requirement to provide the list by either: (1) obtaining the list through the CFPB’s website, Find a Housing Counselor or (2) generating lists independently by using the same HUD data in accordance with the Bureau’s instructions. The list provided to the applicant must include specific information about ten agencies in the applicant’s area. The Interpretative Rule and Summary also provides explanatory text that lenders should include to ensure compliance with the rule.
For lenders that intend to comply with the rule by generating an independent list, it will be difficult to complete the necessary technology enhancements by the January 10 effective date. The CFPB issued a Guidance Bulletin providing an alternative path toward compliance for these lenders. While these lenders incorporate the list instructions into their systems, they can direct applicants to the CFPB’s housing counseling agency website using the disclosure text and format included in the Bulletin. Lenders that follow the Bulletin in “good-faith” can avoid supervisory or enforcement concerns while building their systems.
- View the CFPB housing counseling agency tool: Find a Housing Counselor
- Read more: High-Cost Mortgage and Homeownership Counseling Amendments