Following an announcement by the Consumer Financial Protection Bureau (CFPB) regarding ongoing revisions to several new mortgage rules, a trade group has requested a delay for the planned January 2014 implementation date.
“The CFPB’s rules and commentary continue to evolve in very fundamental ways,” the American Bankers Association said in comment letters Monday. “ABA believes that a limited delay of the effective date of these rules is the only option that assures an orderly transition to the new mortgage regulatory structure.”
Current rules regarding which bank staff qualify as loan originators are “confounding and extremely challenging to apply to the real world,” ABA said in response to CFPB’s proposed revisions to the loan originator rule in early July.
The trade group also requested further clarification on the inclusion of third-party charges in the points and fees test contained in the rule.
The CFPB should adopt loan origination definitions as defined in the 2008 SAFE Act, says the ABA, and the effective date for the LO compensation provisions should apply to transactions consummated or paid on or after January 1.
ABA supported the proposal to define “financing” as covering the right to defer payment of a credit insurance premium or fee owed by the consumer beyond the month or period in which the premium is due. The definition’s modification was advocated by ABA’s American Bankers Insurance Association subsidiary.
In addition to the loan originator letter, ABA also submitted a servicing comment letter responding to revisions on the serving rule. ABA recommended redefining the 120-day rule’s “first notice or filing” standard so that it aligns with state laws related to foreclosure proceedings. The group also advocated to expand exceptions to the 120-day foreclosure ban, clarify a servicer’s obligations regarding incomplete loss-mitigation applications, and expand the period for short-term forbearance.