The Consumer Financial Protection Bureau has announced year-long plans for guiding the mortgage industry’s compliance with new consumer protection rules that go into effect in January 2014.
Under the Dodd-Frank Act, the CFPB was required to issue new mortgage rules by Jan. 21, 2013. Having met that deadline it has established a January 1, 2014 deadline for the industry to comply. Among the new mortgage rules is an “ability-to-repay” rule, which requires that lenders make a “reasonable, good faith determination” that prospective borrowers have the ability to repay their mortgage. The rule also protects borrowers from risky lending practices, such as underwriting loans based only on low introductory “teaser” interest rates. New mortgage servicing rules address appraisals, escrow accounts, protections for high-cost mortgages, and compensation and qualifications for loan originators.
