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CFPB Releases Mortgage Origination Exam Procedures
On January 11, the CFPB took its first action to implement its nonbank supervision program by releasing the procedures it will use in examining all bank and nonbank mortgage originators. The Mortgage Origination Examination Procedures describe the types of information examiners will collect to (i) evaluate policies and procedures, (ii) assess compliance with applicable consumer financial services law, and (iii) identify risks to consumers throughout the mortgage origination process. CFPB mortgage origination exams will focus on specific products and will cover one or more of the following modules: (i) company business model; (ii) advertising and marketing; (iii) loan disclosures and terms; (iv) underwriting, appraisals, and originator compensation; (v) closing; (vi) fair lending; and (vii) privacy. These newly released procedures are an extension of the Supervision and Examination Manual the CFPB released in October 2011 (see BuckleySandler Special Alert, October 17, 2011).
Illinois Amends Mortgage Originator Licensing Requirements
On January 6, the Illinois Department of Financial and Professional Regulations published amendments to regulations governing mortgage originator licensing. The amendments, which are effective immediately, include an increase in certain fees paid by mortgage loan originators to cover costs incurred by the Department in providing current services. Other amendments include those to (i) reestablish and update license reporting provisions, including through the use of the Nationwide Mortgage Licensing System and Registry, to implement state-law changes required by the federal SAFE Mortgage Licensing Act; (ii) require submission of a purchasing activity report; and (iii) establish a new standard for payment processing by servicers. The purchasing activity report requires annual reporting of (i) the names of originating entities, (ii) dollar amounts for each loan by property address, (iii) dollar amount of Illinois loans contained in a multi-state property portfolio, and (iv) total dollar amount for all Illinois loans purchased.