CFPB Is Implementing Counseling Class Guideline On January 10, 2014

CFPB Is Implementing Counseling Class Guideline On January 10, 2014 .  As I stated at the end of my blog  "CFPB Mortgage QM Rules Overviw" there is a Consumer Financial Protection Bureau (CFPB) Guideline going into effect on January 10, 2014 which has not been talked about much and not well known.  The new CFPB Guideline will require ALL Lenders to include a written list of Homeownership Counseling Organizations with EVERY Loan within 3 days of Mortgage Application.

The new CFPB Counseling Class Guideline requires Lenders to give Borrowers a written list of Homeownership Counseling Organizations with EVERY Loan within 3 days, BUT does not require Borrowers to take the Counseling Classes.  Also Lenders are not required to advise Borrower to take the Counseling Classes, but simply to make them aware of their availability.

The CFPB Guideline requires the list of Homeownership Counseling Organization to include:

• The Agencies closest to the Zip Code of the Borrower's current address (not the address of the property they are purchasing).
• The List MUST contain the TEN (10) closest approved Housing Counseling Agencies.
• The List MUST contain the following verbiage:

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 HUD link above takes the Borrower to a link which will then provide links to Housing Counseling Agencies for each state, but there is a more direct link which will provide the 10 closest Housing Counseling Agencies by Zip Code http://www.consumerfinance.gov/find-a-housing-counselor/

This is in my opinion another example of a CFPB Guideline which creates more work for Lenders, kills more trees, and will be use little if at all by Borrowers.  I say this because presently Borrowers HAVE to attend Counseling Classes if they are doing a Downpayment and/or Closing Cost Assistants Loan (DAP), and do not attend most of the time until the last minute, and only after being reminded to do so several times.

CFPB Is Implementing Counseling Class Guideline On January 10, 2014.  This may seem like a great idea, but in my opinion it is another feel good guideline which will do very little more than create more jobs at the cost of the Taxpayer.