United States: CFPB Guidance On Housing Counselor Requirements

On April 15, the CFPB issued a final interpretive rule concerning the requirements for providing mortgage applicants with a list of local homeownership counseling organizations. The new interpretive rule amends and restates guidance the CFPB issued in 2013 and provides additional interpretations and guidance describing what addresses of the borrower may be used for purposes of generating a list of local counselors, how to provide applicants abroad with homeownership counseling lists, permissible geolocation tools which may be used, and combining the homeownership counseling list with other disclosures. The revised interpretive rule also provides additional guidance on required qualifications for counselors who provide high-cost mortgage counseling and on the permissibility of lenders participating in that counseling.

By way of background, the Dodd-Frank Act amended section 5(c) of the Real Estate Settlement Procedures Act to require lenders to provide federally related mortgage loan applicants with an updated list of homeownership counselors who are certified by HUD and located in the area of the lender. In implementing this provision of the Act, the CFPB adopted §1024.20(a)(1) of RESPA Reg. X which requires lenders to provide applicants with a written list of homeownership counseling organizations that provide relevant services in the loan applicant's location. The Bureau specified two methods for obtaining this list: 1) using a tool developed and maintained by the Bureau on its website, or 2) using data made available by the Bureau or HUD for the lender to generate its own list, provided that the data are used in accordance with the agency's instructions provided with the data. Since issuing the original interpretive rule in 2013, the Bureau has received questions and requests for additional guidance, and the Bureau issued this official interpretation in response. The rule interprets §1024.20(a)(1) of RESPA Reg. X and §1026.34(a)(5) of TILA Reg. Z regarding pre-loan counseling requirements for HOEPA high cost mortgage loans.

Under Reg. X, lenders must generate a list of homeownership counselors either by using the tool developed and maintained by the Bureau on its website or by using data made available by the Bureau or HUD to generate the list, but the data must be used in accordance with the Bureau or HUD instructions for its use. HUD maintains a free and publicly available application programming interface containing data on HUD-approved housing counseling agencies. Although it appears on this site that a token is required to use the data, credentials are not required to access and use the data. The Bureau also has a summary of the data instructions available on the Bureau's website, along with a link to the publicly available housing counseling agency data.

In order to comply with the requirement, lenders must provide a list of ten HUD-approved housing counseling agencies. The tool maintained by the Bureau will generate a list of ten counseling agencies. A lender-generated list compiled using agency data must also generate a list of at least ten counseling agencies.

The counseling organizations must also be in the loan applicant's location. Lenders may use the loan applicant's five-digit zip code to generate a list of the ten closest HUD-approved housing counseling agencies which must appear in descending order of proximity to the central point of the zip code. Lenders are also permitted to generate the list using a more precise geographic location, such as a street address. Use of the applicant's current zip code suffices. Lenders may offer applicants the option of generating the list from a zip code different than their home address or from a more precise geographic location, like a street address, but are not required to do so. The Bureau's tool will permit generating the list through entry of zip code. A lender-generated list complies when the lender generates the list using either the zip code or a more precise geographic marker like street address.

In situations where the applicant's current address does not include a zip code, e.g., the applicant currently lives overseas, the lender may use the zip code of the property securing the mortgage to generate the list. There may also be situations where the applicant's current physical address and mailing address are different. For example, an applicant residing in rural area may receive mail at a post office box. In that case, a lender may use the applicant's mailing address instead of the current address to generate the list. A lender may also use an applicant's mailing address to generate the list if the mailing address includes a zip code but the current physical address does not.

The Bureau's tool uses a third-party, commercially-available geolocation tool to match counseling organizations to a zip code. Lenders using the agency data to generate their own list are not required to use the same geolocator or geocoding system as the Bureau, so long as the results are generated in accordance with instructions for use of the agency data.

The written list must be of counseling organizations that provide relevant services in the loan applicant's location. Lenders comply when they provide the following data fields for each housing counseling agency on the list, to the extent that they are available through the HUD programming interface: agency name, phone number, street address, city, state, zip code, website URL, email address, counseling services provided, and languages spoken. The tool maintained by the Bureau will provide these data fields to the extent that they are available through the HUD interface. A lender-generated list complies when those data fields are provided to the extent that they are available through the HUD interface.

The list must also include the following notice: "The counseling agencies on this list are approved by the U.S. Department of Housing and Urban Development (HUD), and they can offer independent advice about whether a particular set of mortgage loan terms is a good fit based on your objectives and circumstances, often at little or no cost to you. This list shows you several approved agencies in your area. You can find other approved counseling agencies at the Consumer Financial Protection Bureau's (CFPB) website: consumerfinance.gov/mortgagehelp or by calling 1-855-411-CFPB (2372). You can also access a list of nationwide HUD-approved counseling intermediaries at http://portal.hud.gov/hudportal/HUD?src=/ohc_nint."

When the Bureau issued the original 2013 HOEPA rule, it stated that the list of homeownership counseling organizations could be combined and given with other mortgage loan disclosures under Regs Z or X, unless specifically prohibited by either rule. Under the revised interpretive rule, the Bureau is making it clear that the list of counseling organizations may also be combined with other disclosures or information besides those required pursuant to Regs X and Z.

The revised interpretive rule also interprets Reg. Z § 1026.34(a)(5) concerning the pre-loan counseling requirement for high-cost mortgages by clarifying the qualifications necessary for counselors to provide high-cost mortgage counseling and by providing guidance on the permissibility of lenders participating in the counseling. Reg. Z provides that a lender may not extend a high-cost mortgage without first receiving written certification that the consumer has obtained counseling on the advisability of the mortgage from a HUD approved counselor or, if permitted by HUD, from a state housing finance authority. Some creditors and counselors raised concerns about the necessary qualifications for providing high-cost mortgage counseling as compared to ordinary "homeownership counseling." Reg. Z comment 34(a)(5)(iv)-1 describes what is necessary for counseling on the advisability of the high-cost mortgage. The counseling must cover key terms of the mortgage transaction as set out in the relevant disclosure (usually the Good Faith Estimate or, after August 1, 2015, the Loan Estimate), the consumer's budget, and the affordability of the mortgage for the consumer.

The Bureau understands that these topics are currently covered by HUD approved counseling agencies in providing homeownership counseling to prospective borrowers. So, until HUD limits the current scope of counseling in some way that would not include the elements listed in the Reg. Z comment, HUD approved counseling agencies that offer homeownership counseling are also qualified to provide the high cost mortgage counseling as long as the required topics are covered.

Finally, the Bureau said it had received information that some consumers may be receiving high-cost mortgage counseling by telephone in a creditor's office while the creditor is present and listening in on the call. In the 2013 HOEPA Final Rule, the Bureau added an anti-steering provision in § 1026.34(a)(5)(vi) that prohibits a creditor from steering or directing a consumer to choose a particular counselor or organization with the rationale of preserving counselor independence and preventing conflicts of interest. In the new interpretive rule, the Bureau clarifies that a lender may be considered to be steering if the lender insists on participating or listening in to a counseling call or session if that affects the consumer's selection of a particular counselor. Lenders are considered to comply with the anti-steering provision if a counselor is allowed to request that the creditor not participate or listen on the call. A counselor must also be allowed to request that a creditor participate in a call or a portion of a call, for example, to provide additional information about the loan. The Bureau is concerned that another counselor might be chosen or the content of the counseling influenced if the counselor requests that the creditor not listen in or participate and the creditor does not agree. Counselor independence and impartiality may also be compromised by the knowledge that the creditor is listening-in to the advice given, and creditor participation in those conversations may influence loan applicants away from a full and frank conversation with the counselor. Note: it might be a wise practice for lenders to not participate or listen in unless actually asked to do so by the counselor.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions