CFPB Updates Mortgage Exam Procedures as QM Rule Arrives

In yet another effort to ensure compliance with its long heralded new mortgage rules, the Consumer Financial Protection Bureau (CFPB) Friday released updates to its mortgage origination and servicing exam procedures.

The updates to the CFPB’s Supervision and Examination Manual provides guidance on how the agency conducts examinations regarding mortgage origination and servicing. 

Originally released in October 2011, the CFPB Supervision and Examination Manual describes how the agency oversees companies that provide consumer financial products and services.

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The manual also provides CFPB examiners direction on how to determine if companies are complying with consumer financial protection laws. 

The mortgage origination examination consists of modules that cover various elements of the mortgage origination process, including identifying specific matters for review. 

Modules include details regarding a company’s business model; advertising and marketing; loan disclosure and terms; underwriting, appraisals and loan originations; closing; fair lending; and privacy issues regarding sharing restrictions of consumer information.

On the servicing side, exam procedures include topics related to routine servicing such as escrow disclosures, loan ownership and servicing transfers; payment processing and account maintenance; consumer inquiries and complaints; credit reporting; and information sharing and privacy. 

Other procedures include default servicing related to collections and accounts in bankruptcy, as well as loss mitigation, early intervention and continuity of contract. Procedures regarding foreclosures are also included in the updated guidance.

“These updates harmonize existing procedures for handling mortgage origination and mortgage servicing examinations with the revised interagency procedures that address the new mortgage regulations in January 2013, which have now taken effect,” the CFPB stated in a release. 

In accordance with the update, the exam procedures for origination and servicing now cover final rules issued by the CFPB through November 2013 and will be incorporated into the Supervision and Examination Manual at a later date.

View the updated guidance.

Written by Jason Oliva

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