The Association For Connecticut's  Entire Mortgage Community

CFPB UPDATE

Tuesday, August 05, 2014 2:50 PM | Anonymous

 

 

 Article By: Kenneth Campbell

 

I was recently asked by CMA to participate in a Delegate Council conference call with NAMB officers. The purpose of the call was to represent Connecticut on the call and hear progress reports on the committee chairs areas of responsibility, goals, and progress towards those goals.

 The call was 90 minutes and I was blown away by the amount of effort these volunteers contribute to their NAMB duties. Most interesting to me was the Government Affairs committee report, chaired by Rick Bettencourt of Massachusetts.

The big  topic with Government Affairs is their relationship with the CFPB. The good news is that there is one! 

The call in which I participated occurred on July 18 and the week before, several NAMB officers had a meeting with CFPB representatives. The CFPB is interested in hearing from the brokerage community, and they agreed to schedule another meeting with NAMB officers in 60 to 90 days and to allow 5 hours for that meeting!

The major issue of discussion at the July meeting was the 3% rule. CFPB made no commitment to review the rule but at least they listened. This is a major change in attitude that those of you who witnessed the implementation of the LO Compensation rule will recognize.

Also discussed were two areas that the CFPB is reviewing. This is not to say that a rule change is imminent; only that they are looking at these issues. There was a public comment period that ended in early July and NAMB submitted comments.

The two areas are cost to cure penalties for violating the 3% of loan costs rule and cost to cure penalties for exceeding the 43% DTI limit. Apparently, there have been instances where, in a post close audit, those numbers have exceeded the allowable limits. I asked Rick under what circumstances does the calculation of a 43% DTI exceed that level at a future date? His response was that income calculations, for example, might be calculated differently by two different underwriters or there might be a simple mathematical error in a calculation.  (I’m not sure how that happens with today’s electronic LOS applications, but that’s what he said.) As I said at the outset, the fact that the CFPB is looking at these things should not lead to the conclusion that there is a new rule coming down the pike.

The take away from this is that NAMB is working hard to influence the CFPB.  You would not be reading this column if you are not somehow related to this industry and I’m sure you also recognize it is in your best interests to have this kind of visibility.  Together with the CMA lobbyist in Hartford, both groups are representing you in their respective governmental seats. If you are not a member of either, consider joining. One of the first questions we are asked by government representatives is how many members do you have? They want to know the size of the constituency they are talking to (substitute the word “size” with “votes.”) Both NAMB and CMA would like to give the biggest number that they can.

 

 

 

 

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