The Consumer Financial Protection Bureau wasted no time in moving forward aggressively with its new director, last week releasing its mortgage origination examination procedures that will be used to scrutinize mortgage lenders and brokers in both the bank and nonbank sector of the industry. The procedures are the clearest indication yet that nonbanks are generally going to be held to the same standards, expectations and requirements as their more traditional banking counterparts. The new procedures outline the CFPB’s supervisory approach to making sure mortgage originators comply with federal...

When it comes to contemplating the wide range of mortgage lending compliance challenges in 2012, it might be useful to borrow from former Defense Secretary Donald Rumsfeld: there are “knowns,” things we know and things we know we don’t know, and there are “unknowns,” things we don’t know that we don’t know.In terms of some of the “knowns,” the mortgage servicing exam procedures released back in October by the Consumer Financial Protection Bureau provide a roadmap for some of the emphasis areas mortgage lenders can expect from their new regulator, according to Christopher Willis, partner in the Atlanta office of Ballard Spahr. “I think fair lending is going to be a very big emphasis area for them,” he said. The recent settlement between the Department of Justice and Bank of America “sets the stage for that to continue to be a very public, very big issue. And that was an origination case; that wasn’t even a servicing case.“And if you read the mortgage servicing exam procedures, the CFPB is saying they want to apply fair lending analysis to things like foreclosures and loan modifications,” he added. “I think that’s going to be a major source of activity.”

The Consumer Financial Protection Bureau has released for public comment two alternative versions of a new mortgage disclosure form that would effectively combine the current disclosure requirements of the final federal Truth in Lending Act and HUD-1 Settlement Statement forms, the second phase of the CFPB’s “Know Before You Owe” program. “We are in the process of replacing these two different forms with one disclosure that is easier to use, consistent with our Congressional mandate in the Dodd‐Frank Act,” the bureau said. “We want to give consumers a clear understanding of the final loan terms and costs in one place. This will make it easier to ensure that you receive the loan product you applied for at the cost you agreed to. And we want to give lenders and settlement agents a well‐organized form to make compliance easier.” An “industry tool” asks industry representatives what their preferred format would be for their customers to use at closing to describe final loan terms and closing costs, while a “consumer tool” asks consumers which form they would prefer to be given at closing to describe those items.