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The Consumer Financial Protection Bureau's new mortgage servicing rules may force some servicers to exit the business altogether or simply outsource servicing of defaulted loans to third-parties, experts said Thursday.
January 17 -
The CFPB released its long-awaited final rule laying out how lenders must ensure borrowers have the ability to repay a loan, including creating a carve-out for qualified mortgages.
January 10 -
Bankers are expected to learn in 2013 what trades the Volcker Rule allows, what qualifies as a "qualified mortgage" and what it means to be "systemically important."
January 3 -
The Consumer Financial Protection Bureau finalized its first rule and took its first enforcement actions this year, but its most challenging work is still to come.
December 28
WASHINGTON — The Consumer Financial Protection Bureau is launching a yearlong plan to help lenders comply with the onslaught of mortgage rules by the 2014 deadline.
The agent said Wednesday that it will implement a plan over the next year to make sure the mortgage industry is in compliance with rules issued last month, including the so-called qualified mortgage and ability-to-repay rules.
"Our plan is to work with the mortgage industry to ensure that the CFPB's new rules are implemented accurately and expeditiously," said CFPB Director Richard Cordray in the press release. "Both consumers and industry will win when the new rules are understood, applied, and carried out evenly and effectively. Mortgage borrowers, who have dealt with much heartache since the financial crisis, deserve this level of attentiveness."
Under the Dodd-Frank Act, the CFPB released a string of mortgage rules in January that addressed a borrower's ability to repay, what constitutes as a "qualified mortgage," protections for high-cost mortgages and a slew of mortgage servicing rules.
But the industry has long been concerned about meeting the deadlines next year when faced with additional rules expected to be released by other financial regulators this year.
"I can't recall ever seeing so many regulations hitting so quickly across such a wide spectrum of industries," said Jo Ann Barefoot, co-chair at Treliant Risk Advisors, in a recent interview with American Banker. "It's going to be a challenge to implement."
The CFPB said in its plan that it would also coordinate with other federal regulators that examine mortgage companies "to ensure all regulators have a shared understanding of the CFPB's new rules."
The agency also vowed, once again, that it would publish "easy-to-understand summaries" of their regulations in written and video form as well as "official interpretations" on implementing the rules throughout the year. The guides and first official interpretation are expected to be available in the spring.
By the summer, the CFPB will also begin posting check-list guides to help mortgage lenders and servicers update their policies and procedures based on the new rules. The CFPB noted a more in-depth exam procedure is expected to be published by the Federal Financial Institutions Examination Council later this year.
"Industry members will be able to use these examination procedures to conduct self-assessments and internal reviews of their readiness and compliance," the CFPB said.
As for consumers, the CFPB said it would begin "a broad-reaching consumer education campaign" on the new rules as the January 2014 deadline approaches.
