On April 11, 2013 the Consumer Financial Protection Bureau (CFPB) proposed revisions to the final rule it adopted in January 2013. The proposal clarifies the determination method for the “rural” and “underserved” designations and keeps in place certain existing protections for HPMLs until other similar provisions take effect in January 2014.
The January rule can be read to cut off certain existing consumer protections before the new expanded protections take effect. The confusion arose because the escrow rules, which apply to higher-priced mortgage loans (HPMLs), are effective on June 1, 2013. Changes to other HPML provisions, such as the ability to repay rules and prepayment penalty provisions, are effective on January 10, 2014. The proposal assures that the existing ability to repay rules and prepayment penalty provisions that apply to HPMLs remain in effect until the expanded ability to repay rules and prepayment penalty provisions take effect on January 10, 2014.
The proposed rule has a 15-day comment period.
A copy of the proposed rule is available here.