CFPB Publishes Preliminary List of Rural and Underserved Counties For Escrow Rule Implementation

CFPB Escrow

On March 12, the CFPB published a preliminary list of rural and underserved counties for use in implementing certain new mortgage rules, including the rule on escrow account requirements for first-lien higher-priced mortgage loans (HPMLs). That rule created a new exemption for small creditors that operate predominantly in rural or underserved areas. Such a creditor is not required to establish an escrow account for taxes and insurance for an HPML if (i) during the preceding calendar year, it extended more than 50 percent of its total covered transactions on properties that are located in designated rural or underserved counties; (ii) the creditor and its affiliates together originated 500 or fewer covered transactions during the preceding calendar year; (iii) as of the end of the preceding calendar year, the creditor had total assets of less than $2 million; and (iv) the creditor and its affiliates do not maintain certain types of escrow accounts. The CFPB expects to finalize the list of counties, together with technical changes to the rule, before the escrow rule takes effect on June 1, 2013, and notes that some counties’ rural status may change for the 2014 list based on the 2010 Census. The list also impacts implementation of several other CFPB mortgage rules that take effect in January 2014, including the ability to repay/qualified mortgage rule, the HOEPA rule, and the appraisals for HPMLs rule. BuckleySandler has prepared detailed analyses of each of those rules.