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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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
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