Adding to its growing library of Small Entity Compliance Guides, on June 7, 2013, the Bureau of Consumer Financial Protection (“CFPB”) released guidance on the revised Regulation Z (TILA) Loan Originator Rule and the new Mortgage Servicing Rules under Regulation Z (TILA) and Regulation X (RESPA). The rules were issued in January 2013, and compliance with the rules becomes mandatory on January 10, 2014. As with previous Small Entity Compliance Guides published by the CFPB, the latest publications will be useful tools to mortgage lenders and servicers of all sizes.
The Loan Originator Rule Guide addresses the definition of loan originator, prohibitions related to compensation, recordkeeping requirements, loan originator qualification requirements, inclusion of loan originators’ identification numbers on loan documents, compliance policies and procedures, mandatory arbitration and waivers of federal claims and prohibitions on financing single premium credit insurance. The Mortgage Servicing Rules Guide covers error resolution and information requests, force-placed insurance requirements, general servicing policies, procedures and requirements, early intervention with delinquent consumers, continuity of contact with delinquent consumers, loss mitigation, interest rate adjustment notices for adjustable rate mortgages, prompt crediting of payments and responses to requests for payoff amounts and periodic statements for mortgage loans. The guides include “implementation tips” to assist lenders and servicers as they undertake implementation of these large-scale changes to their systems.