Just in case you think your advocacy voice is never heard, I’m here to tell you it is! Bear with me and I’ll explain.
Last week, the CFPB released its interim final rule easing mortgage restrictions on many small creditors by expanding the number of community banks eligible for escrow and balloon loan exemptions. This resulted from community banking relief provisions in the recently passed Highway Bill.
So, effective March 31, 2016, any small creditor (in our case, community banks having $2 billion or less in assets who originate fewer than 2,000 loans per year including portfolio loans) that makes a SINGLE loan in a rural or underserved area in the previous year can receive; (1) the portfolio balloon loan exception (including Qualified Mortgage safe harbor status) and (2) the higher priced loan escrow exemption for rural lenders. This is a big deal for ICBND members as community banks were only eligible for these exemptions previously if they operated “PREDOMINANTLY” (meaning more than 50% of mortgage loans) in rural or underserved areas.