The Consumer Financial Protection Bureau has released a plan to assess the effectiveness of the Ability-to-Repay/Qualified Mortgage rule. The bureau is asking the public to comment on the plan, suggest sources of data, and provide information that would help with the assessment.
“Conducting the assessment will advance our knowledge of the benefits and costs of the key requirements of the ATR/QM rule,” said a CFPB blog post on May 25. “The assessment will also provide the public with information on the mortgage lending market, and help us to fulfill our commitment to be an evidence-based and effective agency.”
Following the 2008 financial crisis, Congress enacted the Dodd-Frank Act in 2010, which established new standards for mortgage lending that, among other things, required lenders to assess consumers’ ability to repay the loan. The Dodd-Frank Act also provided for a class of “qualified mortgage” loans that cannot have certain risky product features and are presumed to comply with the ATR requirement. The CFPB issued a rule to implement these standards in January 2013 and amended it a few times before ATR/QM rule took effect on Jan. 10, 2014.
The CFPB is conducting an assessment of the rule and will issue a report of the assessment by January 2019. Comments on the plan are due by July 31.
To read the Federal Register notice regarding the ATR/QM rule assessment, click here.
South Carolina to adopt Uniform State Test
The South Carolina Department of Consumer Affairs and the South Carolina Board of Financial Institutions announced they will adopt the National SAFE MLO Test Component with Uniform State Content effective Sept. 16.
The two South Carolina agencies will become the 56th and 57th state agencies nationwide that will no longer require a second state-specific test component to be taken by mortgage loan originators seeking licensure in the state. The new South Carolina law also will require three hours of pre-licensure education by new licensees and one hour of annual continuing education for renewing licenses.
For a map of the states that have adopted the Uniform State Test, click here.
Federal agencies issue advisory on appraiser shortage
Federal bank regulatory agencies issued an advisory May 31 that highlights two options designed to help address a growing shortage of state certified and licensed appraisers, particularly in rural areas. The joint advisory was issued by the Federal Reserve Board, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency.
During the Economic Growth and Regulatory Paperwork Reduction Act review process, financial industry representatives raised concerns about the timeliness of appraisals, which they attributed to shortfalls in the availability of state certified and licensed appraisers, particularly in rural areas.
The advisory discusses two alternatives that may help in areas facing a shortage of appraisers:
• Temporary practice permits allow appraisers credentialed in one state to provide their services on a temporary basis in another state experiencing a shortage of appraisers, subject to state law. The advisory also discusses reciprocity, in which one state allows appraisers that are certified or licensed in another state to obtain certification or licensing without having to meet all of the state’s certification or licensing standards.
• Temporary waivers set aside requirements relating to the certification or licensing of individuals to perform appraisals under Title XI of FIRREA in states or geographic political subdivisions where certain conditions are met. Temporary waivers may be granted when it is determined that there is a scarcity of state certified or licensed appraisers leading to significant delays in obtaining an appraisal.
To read more about the advisory, click here.
CFPB seeks comments on assessment of mortgage servicing rules
The Consumer Financial Protection Bureau announced May 4 it is conducting an assessment of the Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act (Regulation X). The bureau is seeking public comment on its plans for assessing the rule, as well as on certain recommendations and information that may be useful in conducting the planned assessment.
Comments are due by July 10. Read the Federal Register notice by clicking here.
Updated national test outline posted on NMLS website
An expanded version of the National Test Content Outline for the SAFE MLO National Test with Uniform State Content has been posted on the NMLS Resource Center. The expanded test outline includes more focused information to better serve the needs of the test taker.
The updated outline is available by clicking here.
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