Changes to the Home Ownership and Equity Protection Act (HOEPA) that focus on housing counseling and disclosure requirements could have an adverse impact on reverse mortgage counseling agencies, lenders, and originators, writes the National Reverse Mortgage Lenders Association in comments recently submitted to the Consumer Financial Protection Bureau.
The changes, mandated under Dodd-Frank, impose new counseling requirements—one of which will ensure that lenders provide a list of housing counselors to any potential borrowers seeking federally related mortgages, including forward loans and non-FHA reverse mortgages. The requirement could put undue stress on a reverse mortgage counseling system that is already working under limited resources, NRMLA says.
NRMLA recommends an exemption for Home Equity Conversion Mortgage (HECM) originators while those offering non-FHA reverse mortgages can be compliant if they meet current HECM counseling disclosure requirements.
The disclosure requirements will take an undue amount of time to process and understand, as well, NRMLA states in the comments. “We believe the Bureau has woefully underestimated the time it will take affected entities and their personnel to read, review and be trained on the new regulations.”
View the comment letter to the CFPB.
Written by Elizabeth Ecker