The CFPB issued updates to its examination procedures for the Truth in Lending Act and the Real Estate Settlement Procedures Act to incorporate the mortgage rules finalized by the CFPB in January 2013 (see January 10, 2013 Alert for discussion of ability-to-repay final rule and January 22, 2013 Alert for discussion of mortgage servicing rules). In addition to changes to the ability-to-repay and qualified mortgage rule, the updated examination procedures cover rules governing high-cost mortgages and appraisals for higher-priced mortgages; amendments to the escrows rule; and changes to credit card rules. The CFPB notes a focus on the following areas: lenders’ consideration of borrowers’ ability to repay in making lending decisions; the banning or limiting of certain points, fees, and “risky features”; requirements for providing monthly statements and disclosures; restrictions on dual-tracking (processing foreclosure and loan modifications simultaneously on parallel tracks); requirements for access to servicer personnel and licensing/certification requirements for appraisers.
In conjunction with the release of the amended examination procedures for the mortgage rules, the CFPB also updated its small business compliance guide for the ability-to-repay and qualified mortgage rule (see April 16, 2013 Alert for previous compliance guide). The updated guide incorporates changes made to the ability-to-repay and qualified mortgage rule in June and July (see June 11, 2013 Alert).