WASHINGTON (5/11/12)--The Consumer Financial Protection Bureau (CFPB) this week previewed upcoming mortgage rulemaking, hinting that rules regulating mortgage origination points and fees, and addressing mortgage loan originators' qualifications and compensation, are under development.
"Mortgages today often come with so many different types of fees and points that it can be hard to compare offers," CFPB Director Richard Cordray said in a release. "We want to bring greater transparency to the market so consumers can clearly see their options and choose the loan that is right for them," he added.
To address mortgage market issues, the CFPB said it is considering:
- Requiring lenders to give borrowers at least a certain minimum reduction of the interest rate in return for paying discount points on a mortgage;
- Requiring lenders to offer consumers a no-discount-point loan option; and
- Banning mortgage loan origination charges that vary with the size of the loan, instead allowing brokerage firms and creditors to only charge flat origination fees.
The CFPB is also considering setting qualification and screening standards for loan originators. Under the potential standards, loan originators would need to meet certain character, fitness, and financial responsibility standards, would be required to submit to criminal background checks, and would need to undertake origination training that is specific to the types of loans they process.
Rules that would reaffirm a Federal Reserve Board regulation that prevents loan originators from receiving compensation based on a loans interest rate or other loan terms are also under consideration, the CFPB said.
A CFPB Small Business Regulatory Enforcement Fairness Act (SBREFA) panel discussion on these mortgage issues is expected to be held in the coming weeks, and a full slate of mortgage rules is expected to be proposed by the CFPB this summer and finalized by January 2013. The agency said it could provide an implementation period of up to one year, but has not decided how long of a transition period is necessary yet.
The CFPB also continues to work on revised mortgage applications and mortgage loan closing documents, and proposed forms of these disclosures are scheduled to be released in July.
For the full CFPB release, use the resource link.