Richard Sweum: Homeownership Counseling and Instruction a requirement?
Not necessarily...yet. A lending requirement sunami of sorts is about 2 miles offshore courtesy of the CFPB. January 10th could possibly be remembered as a "day of days," the date which many CFPB requirements go into effect that range from loan servicing to homeownership counseling. I do homeownership counseling with all of my clients, even clients that have owned homes previously. It is good to have a refresher course related to the rights, responsibilities, and risks associated with home ownership AND the financing that comes along with it. All in all, the lending regulations are going to tighten, debt to income ratio acceptance will be more restrictive, and the arduous journey of obtaining a home loan will get a little steeper and longer. BUT... financing will still be available. While the CFPB stopped short of requring that all buyers obtain 3rd party homeownership counseling, they are requiring that every potential borrowers gets provided with information on where to get counseling from HUD approved housing counseling agencies. Not a bad thing. Here is some guidance from the CFPB on the new requirements:
The Consumer Financial Protection Bureau (CFPB) is issuing this bulletin to provide guidance to lenders regarding the homeownership counseling list requirement finalized in the High-Cost Mortgage and Homeownership Counseling Amendments to the Truth in Lending Act (Regulation Z) and Homeownership Counseling Amendments to the Real Estate Settlement Procedures Act (RESPA Housing Counselor Amendments) Final Rule (2013 HOEPA Final Rule)1 Pursuant to the Dodd-Frank Act, the CFPB issued the RESPA Homeownership Counselor Amendments in January 2013, effective on January 10, 2014.
The 2013 HOEPA Final Rule requires lenders to provide applicants for federally-related mortgages with a written list of HUD-approved housing counseling agencies. A lender may fulfill the requirement in one of two ways: the lender may obtain the lists through the Bureau’s website, www.consumerfinance.gov/find-a-housing-counselor; or, in the alternative, the lender may generate lists by independently using the same HUD data that the Bureau uses on HUD-approved counseling agencies, in accordance with Bureau’s list instructions.
2 The Bureau published an interpretative rule on November 8, 2013, which provides the list instructions and clarifies how lenders may generate their own lists.
Richard Sweum: Homeownership Counseling and Instruction a requirement?
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