The Consumer Financial Protection Bureau has released its final interpretation of a regulation that outlines mortgage lenders’ duty to provide mortgage applicants with housing counselor information.

The Consumer Financial Protection Bureau has released its final interpretation of a regulation that outlines mortgage lenders’ duty to provide mortgage applicants with housing counselor information.

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires mortgage lenders to give borrowers lists of local housing counselors shortly after they apply for a mortgage so they know where to get help when deciding the best loan product for them. Lenders may fulfill this requirement by using CFPB-developed housing counseling lists, which are available through an online tool the bureau created in 2013, or by generating their own lists using the same Department of Housing and Urban Development data that the CFPB uses to build its lists.

The CFPB’s tool uses a third-party, commercially available geolocation tool to match counseling organizations to a ZIP code. A lender is not required to use the same geolocator or geocoding system as the bureau as long as the results are generated in accordance with its instructions, ensuring general consistency.

The CFPB’s newly issued interpretive rule restates guidance the bureau issued in 2013 and provides further guidance for lenders who are building their own lists of housing counselors. Lenders are considered in compliance with the requirements when they use a loan applicant’s five-digit ZIP code to generate a list of the 20 closest HUD-approved housing counseling agencies, in descending order of proximity.

Lenders are also permitted to generate the list from a more precise geographic marker, such as a street address. In circumstances where the applicant’s current address does not include a five-digit ZIP code, such as instances in which the applicant currently lives overseas, making it impossible to generate a list based on the ZIP code of the applicant’s current address, the lender may use the five-digit ZIP code of the property securing the mortgage to generate the list.

In other cases where an applicant’s current and mailing addresses are different, such as when an applicant residing in a remote area may receive mail at a post office box, a lender may use an applicant’s mailing address instead of the current address to generate the list.

Because the interpretive rule articulates the CFPB’s already official interpretations of Regulations X and Z, and makes no substantive revisions, it is exempt from the Administrative Procedure Act’s notice-and-comment rule-making requirements, and it is immediately effective. To view the entire interpretive rule, visit http://www.consumerfinance.gov/f/201504_cfpb_housing-counselor-interpretive-rule.pdf.

Email Amy Swinderman.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×