HOMEOWNERSHIP COUNSELING ORGANIZATIONS LISTS

Section 1024.20(a)(1) of Regulation X requires lenders to provide the loan applicant with a written list of homeownership counseling organizations that provide relevant services in the loan applicant’s location. The rule is effective on January 10, 2014.

On November 7, 2013 the Consumer Financial Protection Bureau (CFPB) issued a final rule and made available a tool that produces the appropriate list of counselors. A lender may use the CFPB tool or may develop its own tool using data made available by the CFPB or HUD. A copy of the final rule is available here. The tool is available here.

Section 1024.20(a)(1) requires lenders to provide a written list of homeownership counseling organizations. Lenders comply with this requirement when they provide a list of the ten HUD-approved housing counseling agencies located closest to the centroid of the zip code of the borrower’s current address, in descending order of proximity to the centroid. The zip code of the borrower’s current address is the default to be entered for list generation. Lenders may offer borrowers the option of generating the list from a zip code different than their home address, or from a more precise geographic marker such as a street address, but lenders are not required to offer such an option.

The list must include the agency name, phone number, street address, street address continued, city, state, zip code, website URL, email address, counseling services provided, and languages spoken. Providing a street address is preferable to providing a mailing address. The CFPB tool provides these data fields.

Lenders comply with 1024.20(a)(1) when the following language is included:

The counseling agencies on this list are approved by the U.S. Department of Housing and Urban Development (HUD), and they can offer independent advice about whether a particular set of mortgage loan terms is a good fit based on your objectives and circumstances, often at little or no cost to you. This list shows you several approved agencies in your area. You can find other approved counseling agencies at the Consumer Financial Protection Bureau’s (CFPB) website: consumerfinance.gov/mortgagehelp or by calling 1-855-411-CFPB (2372). You can also access a list of nationwide HUD-approved counseling intermediaries at https://portal.hud.gov/hudportal/HUD?src=/ohc_nint.”

Giving borrowers the link to HUD-approved national counseling intermediaries offers borrowers additional housing counseling options, as national intermediaries offer phone counseling and online counseling services, which are particularly useful to borrowers in remote areas or areas less-dense with counseling agencies. The lists generated by the CFPB’s tool include this text.

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