Proposed amendments to Reg Z and Reg X change the approach to homeownership counseling from (before) a mere notice to delinquent borrowers to (proposed) a proactive measure to try to ensure a better fit between borrower and loan.

New notices will be required, and on two types of loans you'll need to confirm the counseling has actually been obtained before you can consummate. Lots of nuances here -- and lots of questions.

Don't you want to know how the cost of counseling will be handled -- will it be part of the finance charge? How about estimates for it -- where to they go?

I know you have opinions and questions. Let's hear them!

The comment deadline is October 15, 2012.

Here's the link:

https://www.federalregister.gov/articles...ct-regulation-z

I'm fine with the idea of new homeowners having counseling prior to signing a long term committment (some mortgages last longer than marriages). We are a society of "me + now" and they do need to learn the consequences of missing a payment.

The cost - well, everything is piling up in the APR but we're not fixing the usury level...are we?

I would like to know who is going to end up paying for this as well.

Coming from a very small bank in a rural area where would a borrower go for counseling?

You can go to HUD's website and search your area...or google Homeownership counseling...I did that awhile back...had very limited counseling in any type of close proximity...and we're actually a metro area.

We are an independent community bank with seven branches in three communities. The closest available HUD-approved credit counseling agency is 80 / 90 / 120 miles from our offices. If in-person counseling will be required, applicants in our communities will have difficulty meeting that requirement.

I too agree that this could be a problem for us as well...small rural areas.

I too agree that this could be a problem for us as well...small rural areas.

We currently have a very hard time finding counseling outlets for existing disclosures. If borrowers have to be counseled in person, that will be very inconvenient at best. At worst, and maybe more realistically - it will be close to impossible in rural areas. Not to mention leaving financially literate customers with a very bad impression of the bank for 'forcing' this requirement.

8.2 million originations in 2005 times 8 hours of home ownership counseling would require 65,600,000 man hours of counseling divided by 231 8 hour days worked in a year by each counselor means it would take approximately 35,500 counselors nationwide. Illinois has a little over 4% of the US Population there are 106 HUD approved counseling agencies listed on their website in Illinois, Illinois would need approximately 1500 counselors meaning each office would need around 14 counselors to handle the volume.

The CFPB should should exempt all banks less than $10,000,000,000 in assets from the proposed rules.

I have the same question as well. I think the proposal says the customer can pay for it, but I can't imagine any customer doing so willingly.

This proposal, if implemented, will undoubtedly create a high demand for qualified counseling services, which could result in added employment. One wonders whether some clever soul will find a way to deliver qualified and approved homeowner counseling via the Internet.

No doubt someone is already working on that. Let's just hope we can tell who's qualified versus who's just out for a buck!

Hold on here. Everyone needs to step back and take a deep breath and perhaps read the proposal before throwing up their hands. The proposal only requires counseling in two instances:
1) When the customer is a first time homebuyer AND the loan has a negative amortization feature, or;
2) If the loan is "high cost," i.e., subject to HOEPA/Section 32.

In practice, this probably works out to very fews loans actually being covered. Nobody, but nobody, makes HOEPA loans and relatively few shops make neg am loans any more -- so we're nowhere near needing "35,000 counselors nationwide."

The bigger problem I see is the homeownership counseling notice requirement -- a notice that has to be delivered to all customers in your 3 day package. At worst, this will require your processors to go out to the CFPB's website, retrieve some data and transfer that data to a disclosure -- a lot of extra work for every loan. At best, you will be required to build a computer system that can call the CFPB site, retrieive the data and populate a disclosure automatically -- a nasty programming expense with very little value, especially for refi customers obtaining plain vanilla loans.

But let's keep our eyes on the ball here.

That maybe true, but currently we only 21 in the state and pretty sure the closest one is 2-4 hours away.

Still very inconvenient if one is needed.

We do finance mobile homes, which usually are HOEPA loans. The nearest counseling office is 4 hours away. Not very consumer friendly.

In my opinion, if passed as written, it will have a two prong effect:

1. Some banks will get out of the business of doing these types of loans due to all the hoops that will need to be jumped through;

2. For the banks that will do these loans, borrowers will not understand why they must attend counseling and payfor it which will gennerally "steer" those potential borrowers from seeking a loan.

Couple these two issues along with the fact that many of these counselors are hours away for some people, this will just be a mess.

I am so confused right now with the temporary exemptions and so on...are any of the Reg Z / Respa changes going to actually be required on January 21? Thanks!

I attended a state bankers association meeting last month that included the CFPB - he said that while the regulations have to issued by January 21st, the CFPB is going to stagger the effective dates so that any changes to systems can take place. I guess we will see next month....

JBanker28 - This is by no means an authoritative entry - just my opinion based on what I know or think I know. If I am wrong on any area described below, somoeone will correct it I'm sure.

I used to write rulemaking (14CFR Part 71 mostly) for the FAA. FWIW, so I know a little about how it works.....The President signs bills into laws that have effective dates. From what I've learning in banking, the Regulatory agencies are charged with the authority to convert the law into Administrative law via the Federal Register notices we read and finally publish this law in 12 CFR Part XXXXXX. We at the end of the whip would like to know when we must be compliant with changes - as you asked! The law says one thing (Jan 21st in this case). But the Feds must write the rulemaking to get it into administrative law. How else can their own agencies then Examine us? That being said, as NE Comply answered, the Feds have until Jan 21st to get a Final rule published. We should see those combined RESPA/TILA forms Final rules by Jan21st. The Feds then typically give about 9 months to a year (my estimate and from what I've heard and read) for the banks to become complaint.

Thanks!

Clarification: The January 21 2013 deadline does not apply to the combined RESPA/TILA disclosures. That Dodd-Frank requirement is actually in a section outside of MRAPLA/Title XIV. Only the MRAPLA provisions are saddled with the 1/21/13 "final rule by now or we go without one" provision.

CFPB does plan to finalize the combined disclosures in 2013, but not by 1/21.