With the January 10 effective date closing in the Consumer Financial Protection Bureau (CFPB) is reminding consumers and lenders of the numerous materials and resources it has available regarding its new mortgage rules.
- Sample letters. Two templates are provided to help consumers find solutions to problems with their mortgage servicers. One is suggested for use in requesting that a servicer correct an error and the second for requesting information from a servicer.
- Mortgage Tips: There are a number of different tips on new rights under the new rules for homebuyers and homeowners at every stage of the mortgage process-from taking out a loan to paying it back. The tips also include recommendations for troubled borrowers facing foreclosure.
- Factsheets: There are several, offering overviews of new consumer protections and summaries of new procedures to facilitate borrowers' access to foreclosure avoidance options.
- Consumer Tools: CFPB also reminds consumers of the tools available on its website including AskCFPB, an interactive page that can provide answers to mortgage related questions and another interactive tool to help consumer find local housing counseling agencies or submit a complaint regarding a financial product.
Another new resource was released today titled Ability to Repay Rules: Protecting Consumers from Debt Traps. The three-page publication summarizes the new rules defines Qualified Mortgages and explains the rationale for the new rules, saying in part: "Certain types of mortgages are more likely to become a debt trap for the borrower, so the new rule lays out basic guidelines that lenders can follow. They give lenders greater certainty that they are meeting the Ability-to-Repay requirement.
If lenders choose not the follow these guidelines, they can still make a loan based on their reasonable, good-faith determination that the borrower has the ability to repay it. Bottom line: The Ability-to-Repay rule is intended to prevent consumers from getting trapped in mortgages that they cannot afford, and to prevent lenders from making loans that consumers do not have the ability to repay. It's that simple."
In a section called "Fact or Fiction" the new publication addresses seven "fictions" about the rules such as that they will require 20 percent down payments, make loans unavailable to the self-employed; put a hard cap on debt to income ratios, or drive smaller lenders out of business, and presents "facts" to refute each.
CFPB Director Richard Cordray said, "Taking out a mortgage to buy a home is one of the biggest decisions a consumer can make. We want to make sure that people are aware of their new protections so they have the knowledge to make sound decisions about their financial futures."
The materials are available on the Bureau's website (www.CFPB.gov).