I’ve been reviewing a lot of real estate lending policies lately, and a common issue I am finding is out-of-date thresholds.
The CFPB’s Ability-to-repay/Qualified Mortgage rule and Home Ownership and Equity Protection Act (HOEPA) rules, which were effective in January of 2014, contained provisions for coverage thresholds to be adjusted annually to account for inflation. However, many credit unions have forgotten to account for these changes in their annual policy reviews.
If your responsibilities include reviewing and/or updating real estate policies, I’d recommend adding a reminder to your “To Do” list for November or December each year. At that time, you’ll want to ensure that you’ve updated the thresholds in your policy so that the Board can approve it prior to the January 1 effective date.
You may also wish to bookmark this page, as it is the location where the CFPB publishes the updated thresholds.
Until next time, if you feel like talking compliance, you know were to find me.