Dodd Frank Act: Mortgage Rules - IBAT
Dodd Frank Act: Mortgage Rules
Karen M. Neeley
? 2012, Cox Smith Matthews
Incorporated
1
Save the date!
The following is a summary of the CFPB rules implementing Dodd Frank Act mortgage requirements.
The IBAT Lending Compliance Summit will review these issues in more depth.
Mark your calendars for August 15-16!
? 2012, Cox Smith Matthews Incorporated
2
Mortgage Reform and Anti-Predatory Lending Act
CFPB has issued essential rules. DFA made effective date January 21, 2013 UNLESS
rules were adopted prior to that date. DFA can only adopt rules IF it has a director in place. Director Cordray's appointment is in question due to
issues relating to "recess" appointment. So, the following material is subject to change!
? 2012, Cox Smith Matthews Incorporated
3
Rules effective June 1, 2013
Mandatory pre-dispute arbitration is prohibited in mortgages secured by dwelling and HELOC.
Financing single premium credit insurance on mortgage secured by dwelling is prohibited.
Monthly premium credit insurance is okay.
Escrow requirement for HPML is extended from one year to five.
Exemption for rural and underserved areas...as narrowly defined in the rule
? 2012, Cox Smith Matthews Incorporated
4
HOEPA Changes
Effective date: January 10, 2014 Scope expanded to all types of mortgage loans secured
by principal dwelling (including HEL and HELOC) Exemptions for loans to finance initial construction,
loans originated by Housing Finance Agencies and USDA Rural Housing Service Direct Loan Program
? 2012, Cox Smith Matthews Incorporated
5
HOEPA Coverage Tests
First lien: more than APOR + 6.5% First lien, manufactured housing and less than $50K:
APOR + 8.5% Junior liens: more than APOR + 8.5% Points & fees exceed 5% of total transaction; loan below
$20K, lesser of 8% or $1,000 Prepayment penalty more than 36 months after closing
or that exceed 2% of amount prepaid
? 2012, Cox Smith Matthews Incorporated
6
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