The Consumer Financial Protection Bureau

Homeownership Counseling

RESPA requires that a list of homeownership counseling organizations be provided to a loan applicant no later than three business days after receiving a completed application. The document provided must be a clear, conspicuous written list of homeownership counseling organizations that are local to the consumer and provide relevant counseling services. A lender is considered to be in compliance with this requirement when the following language is used: "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://portal.hud.gov/hudportal/HUD?src=/ohc_nint." The list may not be more than 30 days old at the time that it is provided. It may be provided with other disclosures. Loan counseling requirements include: Counseling requirement for accepting high-cost home loans: HOEPA and its implementing regulations impose a requirement on borrowers to complete counseling with a HUD-approved counselor before accepting a loan that is a high-cost mortgage under HOEPA (12 C.F.R. §1026.32(a)(5)). Counseling requirement for accepting negative amortization loans: first-time borrowers must complete counseling with a HUD-approved counselor before accepting a negative amortization loan (12 C.F.R. §1026.36(k)). Counseling requirement for FHA HECMs: a borrower who is seeking a reverse mortgage from the FHA must complete counseling with a HUD-approved counselor.

Literature

Supervision and Examination Manual Mortgage Origination Examination Procedures

Programs Offered by HUD

FHA

Department of Housing and Urban Development

(HUD) one of the 14 executive departments that is part of the President's Cabinet. HUD was established as a Cabinet-level office in 1968 with the adoption of the Housing and Urban Development Act HUD is still responsible for writing rules for the implementation of the Fair Housing Act and does not share this authority with any other federal agency, though it may coordinate with the CFPB in its enforcement of that law. HUD's Office of Fair Housing and Equal Opportunity enforces the Fair Housing Act by protecting consumers from discrimination based on race, color, religion, sex, national origin, disability, and familial status. When HUD brings enforcement actions and is not able to satisfactorily resolve them, the agency refers these cases to the Department of Justice (DOJ). The DOJ has authority to bring actions for the enforcement of civil rights laws, such as the Fair Housing Act.

consumer financial protection functions

The authority to write rules, initiate rulemaking, or issue orders or guidelines pursuant to federal consumer financial laws Examination authority

CFPB

Consumer Financial Protection Bureau Established under Title X of the Dodd-Frank Act, the CFPB officially opened its doors on July 21, 2011 Consumer Financial Protection Functions Conduct financial education Collect and respond to consumer complaints Research and monitor the markets for consumer financial products and services Supervise covered persons for compliance with federal consumer financial laws Take enforcement actions for violations of federal consumer financial laws has the authority to conduct investigations in order to determine whether any person has engaged, or is engaging, in conduct that is in violation of federal law. Investigations may be conducted jointly in cooperation with other regulators. They may include subpoenas, as well as investigative demands for testimony, responses to written questions, or other documents or materials. The CFPB also has the authority to bring administrative enforcement proceedings or civil actions in federal district court. The agencies the CFPB replaced are prudential regulators. For example, during rulemaking proceedings, the CFPB must consult with the "...appropriate prudential regulators...regarding consistency with prudential, market, or systemic objectives administered by such agencies The Dodd-Frank Act provides that a single director must serve as the head of the CFPB (12 U.S.C. §5491(b)). Appointed by the President and subject to Senate confirmation, the CFPB Director serves a five-year term, unless the President finds it necessary to remove him or her from the position as the result of "...inefficiency, neglect of duty, or malfeasance in office" (12 U.S.C. §5491(c)(3)).

Consumer Complaints: Filing with the CFPB

Consumers may submit complaints online, or by phone, fax, or mail. The CFPB then screens complaints and uses a secure web portal to forward them to the appropriate company. Companies are asked to respond within 15 days, but may indicate that a response is "in progress" when one is not ready. A final response is due within 60 calendar days. Company responses are forwarded to the CFPB and to consumers; after a consumer's receipt of a response, he or she may provide further feedback to the CFPB. While waiting for a response, consumers may check online or by telephone to obtain a status report or to provide additional information. The CFPB uses its "subject matter experts" to help with certain complaints. In establishing a Consumer Response Unit, the law requires the CFPB to coordinate its efforts with the Federal Trade Commission (FTC), as well as other federal and state agencies. The Consumer Response Unit must submit an annual report to Congress, due no later than March 31 of each year. This report must outline the number, type, and resolution of complaints, and must reflect data shared with the FTC and other federal and state agencies. These reports are published online. The CFPB's consumer complaint database accepts complaints related to mortgages, debt collection, credit reporting, bank accounts, credit cards, money transfers, payday loans, student loans, and vehicle loans.

Principles of Examination Process

Focus on consumers Data-driven examination Consistency

Mortgage Origination Examination Procedures

The objectives of an examination are to: Assess the quality of the mortgage originator's compliance management system Identify acts or practices that increase the risk of violating federal laws Gather facts that may determine if a mortgage originator engages in acts or practices likely to result in the violation of federal lending laws, and Determine if violations of the law have occurred and if further supervisory or enforcement action is necessary An examination will determine whether mortgage originators are in compliance with federal consumer financial laws. The Examination Manual also directs examiners to identify any unfair, deceptive, or abusive acts or practices, and outlines the standards that the CFPB will use in assessing UDAAPs. These standards provide that acts or practices are: Deceptive if likely to mislead a consumer, and the consumer's interpretation is reasonable under the circumstances Unfair if injury to consumers is likely, not reasonably avoidable, and is not outweighed by potential benefits Abusive if they interfere with a consumer's ability to understand the terms or conditions of a product or service, exploit a consumer's lack of understanding, or take advantage of a consumer's reasonable reliance on the mortgage professional