WASHINGTON (7/3/12)--The Consumer Financial Protection Bureau has posted an updated list of counties determined to be "rural" or "underserved," for purposes of applying several regulatory provisions throughout the year. The first list covered 2013 and the updated list applies to 2014.
In a blog posting the bureau noted that several of its rules have provisions related to mortgage loans made by creditors which, during the preceding year, operated predominantly in 'rural' or 'underserved' counties or to mortgage loans made in 'rural' counties."
The CFPB said the following rules have provisions that relate to mortgage loans made by creditors operating predominantly in rural or underserved counties or made in rural counties:
CFPB escrow requirements under the Truth in Lending Act rule, which took effect on June 1, requires certain creditors to create escrow accounts for a minimum of five years for higher-priced mortgage loans (HPMLs). However, such loans made by certain small creditors that operate predominantly in rural or underserved counties are exempt from this requirement.
Under the January 2013 Ability-to-Repay and Qualified Mortgage (QM) standards under the Truth in Lending Act rule, effective Jan. 10, 2014, mortgage loans with balloon payments do not meet the QM standard in most cases. However, certain small creditors that operate predominantly in rural or underserved counties will be eligible to originate balloon-payment QMs.
The CFPB further noted that as part of the May 2013 Ability-to-Repay and QM standards, the bureau recently expanded this exemption to allow certain small creditors during the period from Jan. 10, 2014, to Jan. 10, 2016, to make balloon-payment qualified mortgages even if they do not operate predominantly in rural or underserved areas.
For more, use the resource link to read the CFPB blog post on the 2014 definitions.