The article discusses potential changes being considered by the CFPB regarding loan originator compensation and mortgage servicing rules under TILA and RESPA. The mortgage industry is calling for modernization of these rules, but specific details remain unclear as the process is currently under OMB review. Experts stress the need for clarification on the CFPB's proposed rescission of existing rules, particularly regarding the implications for upfront fees and charges in lender-paid transactions. There is significant concern about how these changes will impact the mortgage industry framework.
A key question is whether a proposed rescission by the CFPB would revert to the Federal Reserve's original rule or leave no rule in place.
Most agree that this rule could use some clarification, since when overhauling the original Federal Reserve Board version, we didn't have time to address every possibility.
The mortgage industry has urged the CFPB to modernize these rules but remains uncertain about what to expect from the process currently under OMB review.
Dodd-Frank Act loan originator compensation provisions, if adopted, could prohibit upfront points, fees, and charges, significantly disrupting the industry.
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