TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/883125
TH E M R EP O RT | 59 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT The Final Rule CFPB rolled out its annual revised dollar amounts for loans falling under Regulation Z, along with a couple of other updates. T he Consumer Financial Protection Bureau re- leased the final ruling for TILA annual threshold adjustments in late August, revis- ing the dollar amounts for loans that fall under Regulation Z. The Bureau is required to calculate the dollar amounts every year and is adjusting the totals based on the annual percentage change reflected in the Consumer Price Index. Implemented from sections 1411 and 1412 of the Dodd-Frank Act, which, according to the Final Rule, "generally requires creditors to make a reasonable, good faith determination of a consumer's ability to repay," a covered transaction is not a qualified mortgage if the transaction's points and fees exceed 3 percent of the total loan amount for a loan amount greater than or equal to $100,000. For a loan amount greater than or equal to $60,000 but less than $100,000, the transaction points and fees cannot exceed $3,000. For loans greater than or equal to $20,000 but less than $60,000, it must be 5 percent of the total loan amount. The threshold is $1,000 for a loan amount greater than or equal to $12,500 but less than $20,000, and for loan amounts less than $12,500, it must not exceed 8 percent of the total loan amount. Also updated in the final rule were the Credit Card Accountability Responsibility and Disclosure Act penalty fee safe harbor and Home Ownership and Equity Protection Act loans. According to the Final Rule, the threshold that initiates the requirement to report minimum interest charges will stay the same in 2018 at $1. For additional information, contact Jaclyn Maier, Counsel, Office of Regulations, Consumer Financial Protection Bureau, 1700 G St. N.W., Washington, D.C. 20552 at 202.435.7700. The final rule goes into effect January 1, 2018. Attention, All HELOC Issuers: Please Report to CFPB The agency temporarily—and maybe permanently— upped the reporting threshold from 100 to 500. T he CFPB in late August announced that the Home Mort- gage Disclosure Act (HMDA), enacted in 1975 and requiring financial institutions to maintain, report, and pub - licly disclose information about mortgages, has been temporarily changed for banks and credit unions that offer Home Equity Lines of Credit (HELOC). The change, which was originally proposed in July, is in response to reporting thresholds that currently require financial institutions to report HELOCs if they made 100 of the loans in the last two years. In the final rule, this threshold will be increased to 500 through 2018 and 2019. The temporary modification allows the CFPB to decide whether it will make a permanent adjustment. "The Home Mortgage Disclosure Act is a vital source of information on the health and fairness of the mortgage market," said CFPB Director Richard Cordray. "Today's amendments show that the Consumer Bureau is committed to ensuring that financial institutions are able to comply with the rule and to promoting transparency across the largest consumer financial market in the world." Key terms were also addressed in the final ruling, such as "temporary financing" and "automated underwriting system." The CFPB also focused on establishing transition rules for reporting certain loans purchased by financial institutions and a change that will facilitate reporting the census tract of a property using geocoding. "The CFPB is committed to well-tailored and effective regulations and has sought to carefully calibrate its efforts to ensure consistency with respect to consumer financial protections across the financial services marketplace," the report cited. The National Association of Federal Credit Unions submitted a letter on the CFPB's proposal in early August to request further defining changes to the proposed rule. This included better defining of a small credit union and urging the threshold change to not only be permanent, but also raised higher. However, the NAFCU said it will be re-engaging with the bureau to ensure the recommendations it submitted are addressed. "The Home Mortgage Disclosure Act is a vital source of information on the health and fairness of the mortgage market." —Richard Cordray, CFPB Director