[rcooper]

A question we received from one of our members:

I had a quick question regarding HOEPA and HELOCS. I have been unsuccessful in locating any real clarification on whether or not when providing borrowers with the homeownership list of counselors whether or not they are required to acknowledge receipt that they received the list. I know that on an HPML and a negative amortization loan you must receive proof that the borrowers received counseling, but I am inquiring about a non HPML and negative am loan and whether or not we need a signed copy of the disclosure acknowledging receipt of the list of counselors. Any guidance you could offer would be greatly appreciated.

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[rcooper]

There are three requirements related to counseling.
· Under 1024.20 you are required to provide a list of counselors within 3 business days of application. There is no signature/acknowledgement requirement.

· Under 1026.34(a)(5) (i.e. High Cost Mortgage/HOEPA) you are required to obtain certification of pre-loan counseling before making the loan.

· Under 1026.36(k) you are required to obtain certification of pre-loan counseling for negative amortization loans made to first time home buyers.

Here’s a link to the CFPB’s Small Entity Compliance Guide on loan counseling: https://files.consumerfinance.gov/f/201401_cfpb_hoepa-compliance-guide.pdf.

Something else to consider, there is no requirement to obtain an acknowledgement of receipt from the borrower, but most examiners will want evidence that the notice was provided. We would advise that your bank either obtain the consumer’s signature acknowledging receipt of the list or have written procedures that require a certain party provide the disclosure and then complete a checklist indicating that the required action has been taken.

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