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CFPB Counseling Classes For All Home Purchases & Refinances

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

The Consumer Financial Protection Bureau (CFPB) implemented a guideline a little over 2 years ago on January 10, 2014, which very few people outside of the Lending Industry are aware of.  Under the new guideline the CFPB established, the CFPB Counseling Classes For All Home Purchases & Refinances

The new CFPB Guideline required ALL Lenders to include a written list of Homeownership Counseling Organizations, with EVERY Loan within 3 days of having the 6 required pieces of information which constitutes a Mortgage Application.  However, even though the CFPB Counseling Class Guideline requires Lenders to provide Borrowers with a written list of Homeownership Counseling Organizations with EVERY Loan within 3 days, it does not mandate Borrowers to take the Counseling Classes.  Also Lenders are not required to advise Borrower to take the Counseling Classes, Lenders only need to make Borrowers aware of the classes, and where to take them.

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/

Since the implementation of this guideline on January 10, 2014, I do not know of a single Borrower who has elected to take one of these classes.  In my opinion this was another example of a CFPB Guideline which creates more work for Lenders, kills more trees, and has been use little if at all by Borrowers. 

While Counseling Classes on the surface may seem like a good idea, the reality is no one really wants to sit through a 3+ hour class.  Even in the case of Borrowers who HAVE to attend Counseling Classes if they are doing a Down Payment and/or Closing Cost Assistants Loan (DAP), they wait until the very last minute, and only take them because they HAVE to.

I wonder how much longer it will be before the CFPB decides to make the CFPB Counseling Classes For All Home Purchases & Refinances, mandatory in stead of voluntary, since no one is taking them.  This in my opinion has been another great example of a feel good guideline which has done nothing more than create more work for Lenders, killed more trees, and costs TAXPAYERS more money. 

 

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Posted by

George Souto
NMLS# 65149

C (860) 573-1308
CALL 7 Days/Wk
Fax (860) 760-6891

Email Me
About Me
My Blog

I am a Mortgage Loan Officer who can assist you with all your mortgage & refinancing needs in
CT, and RI

I can assist you with your Conventional,
FHA, CHFA, VA, USDA, & 203K loan programs.

I reside in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Haddam. E. Haddam, Higganum, Chester, Essex, Deep River.

 

Comments(27)

Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

George I so agree with you No one wants to sit through anything that is 3hrs long... that goes for listing presentations....writing an offer you name it... bad idea, Endre

Apr 28, 2016 04:30 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning George. Hope that doesn't happen, but nothing would surprise me these days when it comes to the mortgage process. I certainly don't mind giving my client an option, but beyond that would be nuts.

Apr 28, 2016 06:28 PM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Yicls...lots of patiene required ....and amazing that there would be a full class !

Apr 28, 2016 07:07 PM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks George.  I was not aware of this requirement.  And, for many borrowers it would benefit them greatly if they attended one of these sessions.

Apr 28, 2016 08:58 PM
Sham Reddy CRS
Howard Hanna RE Services, Dayton, OH - Dayton, OH
CRS

Thanks for sharing!!!

CFPB Counseling Class Guideline requires Lenders to provide Borrowers with a written list of Homeownership Counseling Organizations with EVERY Loan within 3 days, it does not mandate Borrowers to take the Counseling Classes.  Also Lenders are not required to advise Borrower to take the Counseling Classes, Lenders only need to make Borrowers aware of the classes, and where to take them

Apr 28, 2016 09:18 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Hi George... that's exactly what I was thinking.... when will Big Brother make classes mandatory? 

Apr 28, 2016 09:38 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning George Souto ,

Excellent post and glad to see it featured. A mandatory class is not what the consumer needs..another case of Big Brother trying to mandate another layer of unnecessary red tape!

Apr 28, 2016 09:55 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

George, sounds like another government idea that wasn't a good idea.    Thanks for giving us heads us.

Apr 28, 2016 10:48 PM
Chris Lima
Turtle Reef Realty - Port St Lucie, FL
Local or Global-Allow me to open doors for you.

Thanks for the post.  It reminds me of a time long ago and far away when I was buying my first house.  I had to attend a seminar and complete a workbook in order to qualify for the mortgage.

Apr 28, 2016 11:21 PM
Rob Spinosa
US Bank - Larkspur, CA
Mortgage Loan Originator, Marin County

Until enough consumers finally rise up and change things, the CFPB will continue on its mandate to provide taxpayer-funded, PhD level diplomas in compliance and regulation to consumers who don't even want to go to college.

If we have 10 loan in process, I spend time on 9 of them trying to walk clients through the layers of disclosures and instructions to act on disclosures.  The consumer is numb to the details that matter, as they are lost in the noise of what doesn't.

"It is easy to make a simple thing complex and hard to make a complex thing simple."  Nothing exemplifies this fact more than the very existence of the CFPB.

Apr 28, 2016 11:36 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Can't print a package (mortgage), if this isn't included.  Just another mandatory step to take, George Souto ... with no clients taking advantage of the classes.  We can say we provided it, but ...

Gene

Apr 29, 2016 12:52 AM
Shirley Coomer
Keller Williams Realty Sonoran Living - Phoenix, AZ
Realtor, Keller Williams Realty, Phoenix Az

I have to wonder if there are any plans to look at all that has been implemented by the CFPB and evaluate the extra time and paperwork required.  Are there buyers who really benefited or is there just a "perceived" benefit? We all know  that ideas on paper don't always translate to a good outcome.  I have more buyers complaining about the extra work and so far no one seems to feel all this really made a difference in their process or protected them from anything.

Apr 29, 2016 02:26 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

George, Dare I ask … what is the point?  That is similar to telling a person with a gambling problem to call the gambling help hotline. Oh wait … “this was another example of a CFPB Guideline which creates more work for Lenders, kills more trees, and has been use little if at all by Borrowers.” Boom there it is!

Apr 29, 2016 03:44 AM
David Alan Baker | Laveen & South Phoenix Realtor
Keller Williams Realty Phoenix - Laveen, AZ
Your local Expert

Not sure it would really make a difference in the end.

Apr 29, 2016 04:29 AM
David A. Weaver
Peoples Bank & Trust Co. - Scottsdale, AZ
24 years helping folks finance their dreams.

Darn It George,  Why did you bring this up?  You know somebody from the CFPB is going to get wind of this, then they'll have to form a committee, who will nominate a chairman with no experience in real estate, who will order a study, which will require lenders to complete a survey, required to be filled out by the loan officer, the loan officer assistant, the set up person, the processor, underwriter, closer and the client, type written in quadrupulicate  and submitted by mail, for every application taken whether approved, declined, suspended, withdrawn or funded.  Penalties will be issued for incorrect spelling and punctuation of course.  Findings will determine if the classes will be deemed mandatory prior to application, funding, etc.  Just you watch and see!!!!!!!  Happy Friday, is the bar open yet.......

Apr 29, 2016 06:28 AM
John Meussner
Mortgages in AZ, CA, CO, DE, FL, GA, IN, MD, MN, MT, NC, NJ, NV, OK, OR, PA, SC, SD, TN, TX, UT, VA, WI - Fair Oaks, CA
#MortgageMadeEasy Fair Oaks, CA 484-680-4852

Once they make them mandatory we'll still have uninformed buyers because no legislation can FORCE people to read documents or pay attention to a class.  What's next?  A home buyer has to pass a written CFPB exam before they're eligible to buy?  Wait...I shouldn't be giving them any ideas...

Apr 29, 2016 06:37 AM
Lisa Von Domek
Lisa Von Domek Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

I am afraid that I am with you George Souto and not only wonder, but believe, that the next step will be the class is required.  More government jobs will be created, though, and that is their goal

And I am cracking up at David A. Weaver comment and please, John Meussner , stop giving out ideas like that!

Apr 29, 2016 12:34 PM
Patricia Kennedy
RLAH@properties - Washington, DC
Home in the Capital

George, there are a few locally available loans that require the buyer to take one of these courses.  One was an attorney, now a Superior Court Judge.  It comes with really low interest rates for first time buyers.

Apr 29, 2016 02:14 PM
Praful Thakkar
LAER Realty Partners - Burlington, MA
Metro Boston Homes For Sale

George Souto - just this one statement in your post says all about government policies --

"Since the implementation of this guideline on January 10, 2014, I do not know of a single Borrower who has elected to take one of these classes."

What a wastage of time, energy and resources!

Apr 29, 2016 03:35 PM
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in Southern RI and beyond

George, this is another sad occurrence of how the government has no idea what is happening in the real world.

Apr 29, 2016 09:01 PM