A final interpretive rule was issued on April 15, 2015 by the Consumer Financial Protection Bureau (CFPB), explaining how to provide mortgage applicants with a list of local homeownership counseling organizations.
The final interpretive rule restates the guidance in the previously issued 2013 HC Interpretive Rule, provides further clarification in response to questions from lenders who are building their own lists of housing counselors, and explains the qualifications for providing high-cost mortgage counseling and for lender participation in such counseling.
For lenders who are building their own lists of housing counselors, the final interpretive rule provides further instructions for the following items: 1) how to provide applicants abroad with homeownership counseling lists; 2) permissible geolocation tools; 3) combining the homeownership counseling list with other disclosures; and 4) use of a consumer’s mailing address to provide the list.
Housing counselors can provide advice to consumers for little or no cost. The Dodd-Frank Act includes a requirement that mortgage lenders provide applicants with a list of local housing counselors. Consumers must receive this list shortly after applying for a mortgage so that they know where to get assistance when deciding what loan is best for them. Lenders may satisfy this requirement by using the CFPB-developed housing counseling lists, which are available through an online tool the CFPB created in 2013. Lenders may also satisfy this requirement by generating their own lists using the same Department of Housing and Urban Development (HUD) data used by the CFPB to build its lists.