12 CFR § 1024.20, which takes effect on January 10, 2014, requires a lender, mortgage broker, or dealer to provide to a loan applicant, within three business days after receipt of a loan application, a list of homeownership counseling organizations which are located closest to the applicant.
The list provided must be compiled by using data provided by the Consumer Financial Protection Bureau on their website within 30 days of when the list is given to the applicant. The list may either be generated directly from the CFPB’s website (http://www.consumerfinance.gov/find-a-housing-counselor/) or by extracting the necessary data from the Department of Housing and Urban Development’s (HUD) web service (http://data.hud.gov/housing_counseling.html) and using it to create a custom list.
This regulation, which was originally finalized on January 10, 2013, provides that if the data is extracted it must be “used in accordance with instructions provided with the data” (Ibid. § 1024.20[a][i]). These instructions were finally promulgated by the CFPB on November 8, 2013 in an interpretive rule and summary, which requires that the following information be provided in self-generated lists:
1. A list of ten counseling agencies which are closest to the applicant’s current residence, based on the centroid of the zip code of the residence (there are optional alternatives to this).
2. The name of each agency and their phone number, street address, city, state, zip code, website URL, email address, counseling services they provide, and languages spoken.
3. The following specific language:
“The counseling agencies on this list are approved by the U.S. Department of Housing and Urban Development (HUD), and they can offer independent advice about whether a particular set of mortgage loan terms is a good fit based on your objectives and circumstances, often at little or no cost to you. This list shows you several approved agencies in your area. You can find other approved counseling agencies at the Consumer Financial Protection Bureau’s (CFPB) website: consumerfinance.gov/mortgagehelp or by calling 1-855-411-CFPB (2372). You can also access a list of nationwide HUD-approved counseling intermediaries at http://portalhud.gov/hudportal/HUD?src=/ohc_nint.”
This information will also print on lists generated directly from the CFPB’s website, as well as the distance of the agency from the borrower’s residence.
We have been working on creating our own list of counselors (Cx17874) which clients can use to comply with Regulation X’s new requirements. The basic structure of the document has been created (which is formatted to mimic the list of counselors generated directly from the CFPB’s website) and we are working with LOS partners to obtain and import the necessary data from HUD.
However, due to the lateness of providing us and the rest of the industry with instructions, the CFPB has provided a temporary, alternative means for complying with Section 20 of Regulation X by allowing lenders and brokers to provide borrowers with a specific-language notice, until lenders and brokers (and their document providers) are able to generate the list of counselors appropriately. The language for this alternative notice is as follows:
“Housing counseling agencies approved by the U.S. Department of Housing and Urban Development (HUD) can offer independent advice about whether a particular set of mortgage loan terms is a good fit based on your objectives and circumstances, often at little or no cost.
If you are interested in contacting a HUD-approved housing counseling agency in your area, you can visit the Consumer Financial Protection Bureau’s (CFPB) website, www.consumerfinance.gov/find-a-housing-counselor, and enter your zip code.
You can also access HUD’s housing counseling agency website via www.consumerfinance.gov/mortgagehelp.
For additional assistance with locating a housing counseling agency, call the CFPB at 1-855-411-CFPB (2372).”
Due to time restraints and the need to continue to work with LOS partners on extracting data, we will be using this alternative notice in lieu of the actual list of counselors until we are able to fully fill it out. This alternative notice will print when the field for at least one of the housing counselor agency names (out of ten) is empty. We will allow this alternative notice to print for up to six months after the effective date of the new regulations (July 10, 2014), at which point it will be substituted with a warning, advising clients that the list of counselors needs ten agencies to be listed.
Cx17874 will be available to print in Stage, for client testing, on December 19, 2013. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
December 12, 2013