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Webinar Recap: Discussing "The New CFPB Mortgage Origination Rules Deskbook"

CFPB Mortgage Origination TRID

Consumer Finance

On October 28, 2014, BuckleySandler presented the webinar “Discussing The New CFPB Mortgage Origination Rules Deskbook.” Contributors Joseph Kolar discussed the need for the book and highlighted information from specific chapters. The webinar was moderated by Jeffrey Naimon. This webinar recap covers the highlights from their discussion. For more information about the CFPB Deskbook, including information on obtaining hard copies, email CFPBDeskbook@buckleyfirm.com.

The purpose of the CFPB Deskbook is simple – consolidate in a clear, organized format, material from all of the many sources of regulatory guidance on the Consumer Financial Protection Bureau’s (CFPB) mortgage origination rules. .

Kolar followed their general discussion of the book with an overview of what they consider some of the most valuable chapters, including, among others:

  • ATR / QM Rule -- Incomplete Loan File (Chapter 1)
    • The CFPB explicitly declined to adopt a rule, similar to the familiar parol-evidence rule of contract law, under which only the written record of a credit decision at origination could be considered in a later ability-to-repay / QM challenge by the borrower.
    • While this can leave creditors vulnerable to borrower claims in such a challenge that the written record is incomplete and fails to reflect information the borrower supplied.
  • Calculating Points and Fees (Chapter 2)
    • While the rule and commentary are clear on the treatment of private mortgage insurance, the term “prorated” is never defined in the rule itself. This leaves the term up for definition by contracts or state law. However, the CFPB did develop a calculation to define “prorate” –only offered orally in a CFPB staff webinar.
    • The CFPB Deskbook includes transcripts of this webinar and explains the calculation.
    • BuckleySandler also has published a Special Alert on the CFPB’s October 2014 rule amendments, which provide a points-and-fees cure mechanism. An update to the CFPB Deskbook describing those amendments also is coming soon.
  • Loan Originator Compensation Rules (Chapter 4)
    • Naimon described the proxy rules applicable to the ban on term-based loan originator compensation as “a quagmire.” The CFPB Deskbook offers clarification on issues related to proxy such as geography, loan origination channels and borrower income levels.
  • Point Banks (Chapter 4)
    • Since the loan originator compensation rule was released, organizations have sought clarification as to what a point bank actually is and if are they allowed. The CFPB offered clarification on these questions in preamble language, which is captured in the CFPB
  • TILA-RESPA Integrated Disclosures (TRID) Rule (Chapter 10)
    • While this rule is not yet in place, the CFPB Deskbook includes a summary of the rule, as well as discussions of issues raised most often by our clients regarding the rule.
    • BuckleySandler has also developed a TRID Resource Center.