The Consumer Financial Protection Bureau (CFPB) issued final guidance Wednesday on the housing counselor requirement, which orders mortgage lenders to provide borrowers with a list of local homeownership counseling organizations.
The interpretive rule, which restates and clarifies guidance the CFPB issued in 2013, does not apply to reverse mortgages, an agency spokesman confirmed with RMD.
However, it does instruct “forward” mortgage lenders how to provide applicants with a list of local housing counselors and provides guidance for those lenders who are building their own lists of area counselors.
It also includes new instructions about: how to provide applicants abroad with homeownership counseling lists; permissible geolocation tools; combining the homeownership counseling list with other disclosures; use of a consumer’s mailing address to provide the list; and high-cost mortgage counseling qualifications and lender participation in such counseling.
“Buying a home is often the largest financial decision in a consumer’s lifetime, and we want to ensure that consumers can access the independent and informed advice they deserve before making that decision,” said CFPB Director Richard Cordray, in a statement. “Housing counselors are a crucial source of that helpful advice. We will continue to work to improve the home-buying experience for consumers, and today’s interpretive rule will help industry comply with these important protections.”
To read the rule, click here.
Written by Emily Study