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New Rules Regarding "Higher-Priced Mortgage Loans" Regulation Z has been amended to include a defined category of "higher-priced mortgage loans." Among other things, the new rules prohibit a lender from making a higher-priced mortgage loan without considering a borrower's ability to repay, requires lenders to verify income and assets relied upon to determine repayment ability, and imposes restrictions on prepayment penalties. Further, the amendments include additional restrictions applicable to mortgage loans in general, including additional advertising requirements that lenders must comply with. The rules take effect on October 1, 2009.
Amended RESPA Regulations HUD has amended Regulation X, which implements the Real Estate Settlement Procedures Act (RESPA). The new regulations are intended to protect consumers from unnecessarily high settlement costs by enhancing the manner in which settlement costs are disclosed. Among various other revisions, the regulations have standardized the Good Faith Estimate (GFE) form and made significant revisions to the HUD-1/1A settlement statement form. Use of the standardized GFE and revised HUD-1/1A is not required until January 1, 2010.
New Credit Card Rules Regulation Z's new credit card rules that prohibit certain credit card practices go into effect on July 1, 2010. Among other things, the new rules will prohibit interest charges using the "two-cycle" billing method, prohibit payment methods that unfairly maximize interest charges, ensure that consumers have a reasonable time in which to make a credit card payment. Regulation Z is also being amended to revise the disclosures that consumers receive in connection with credit card accounts to ensure that the disclosures are timely and readily understandable.
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"Complying with the Red Flags Rule will be challenging for financial institutions and affected businesses. We are delighted to partner with Compliance Coach to be able to offer to our clients an innovative solution that makes it easier for them to comply." Helen "Rusty" Beckel Senior Vice President Strategy and Market Development Harland Financial Solutions "One of the most difficult things about preparing the bank for a new regulatory requirement is getting started. No one wants to reinvent the wheel, and having an organized framework that CompliancePal provides is a tremendous advantage. The risk assessment portion of the program gets you right on track with evaluating products and services. The system walks you through the process in a logical, organized manner. CompliancePal got us into compliance and we will continue to use it for ongoing compliance so we can stay up-to-date with the dynamic regulatory requirements."
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