CFPB Sets Rules For Housing Counseling Lists

April 16, 2015

The Consumer Financial Protection Bureau issued guidance on how to provide mortgage applicants with a list of local home ownership counseling organizations. The new guidelines, which overwrite ones originally issued in 2013, offer guidance to lenders on how to provide applicants abroad with home ownership counseling lists; permissible geolocation tools; disclosures; and high-cost mortgage counseling qualifications.

"Buying a home is often the largest financial decision in a consumer’s lifetime, and we want to ensure that consumers can access the independent and informed advice they deserve before making that decision," says CFPB Director Richard Cordray. "Housing counselors are a crucial source of that helpful advice. We will continue to work to improve the home-buying experience for customers, and today’s interpretive rule will help industry comply with these important protections."

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires mortgage lenders provide applicants with a list of local housing counselors. After borrowers apply for a mortgage, they should receive a list from lenders of counselors they can choose to consult. Housing counselors can provide advice on the home buying process, renting, defaults, foreclosures, and credit issues.

Lenders can provide borrowers with CFPB-developed housing counseling lists, which are available via an online tool, or by creating their own lists using Department of Housing and Urban Development data.

View CFPB's full interpretive rule issued at the agency’s website.

Source: Consumer Financial Protection Bureau