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The New Requirement to Provide a List of HUD-Approved Homeownership Counselors: (For Some) It'll Be as Simple as Pressing a Button.

As of January 10, 2014, Regulation X will require mortgage lenders to provide the borrower with a written list of local HUD-approved homeownership counseling organizations not later than 3 business days after receiving an application. This requirement will apply to nearly all mortgages, and as of the effective date, it will be found within Regulation X at 12 CFR 1024.20. Until the effective date, you can preview the regulatory language here.

The regulation gives lenders two options for generating the homeownership counseling list. They can generate the list either:

(1) From a tool on the CFPB’s website; or

(2) In a custom format, using the data that HUD provides to the public about HUD-approved homeownership counseling organizations.

The CFPB recently released a bulletin and an interpretive rule designed to help lenders understand these two options better. You can find the bulletin here. You can find a summary of the interpretive rule here, and its full text here. The CFPB’s press release related to these items can be found here.

For lenders that do not intend to create their own custom lists using the HUD data, the CFPB has now introduced the tool, on its own website, that lenders can use to generate the list. The tool can be found online here: Lenders will simply enter the zip code of the applicant, and the tool will automatically generate a list of 10 counselors that can be saved and printed.

For lenders that intend to create custom lists using the HUD data, the HUD data can be found online here, and the CFPB’s bulletin and its interpretive rule (for which links have been provided above) explain what information and features a lender must include on the list to satisfy the regulation. The CFPB’s interpretive rule explains, among other things, that:

  • The list should include at least 10 counseling organizations;
  • The list will satisfy the regulation’s requirement that the counseling organizations be in the “applicant’s location” if the list includes “the ten closest HUD-approved housing counseling agencies to the centroid of the zip code of the borrower’s current address, in descending order of proximity to the centroid.”;
  • The list should include, for each organization, all of the following information, to the extent that it is available in the HUD data: agency name, phone number, full street address, city, state, zip code, website URL, email address, counseling services provided, and languages spoken;
  • The list should include the following disclosure: “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; or by calling at 1-855-411-CFPB (2372).  You can also access a list of nationwide HUD-approved counseling intermediaries at”

Lenders that use lists generated by the CFPB-provided tool generally will not need to worry about all of these details, because, as the CFPB explains in its bulletin and interpretive rule, the CFPB has already incorporated all of these elements in its tool. However, lenders that will build custom lists based on the HUD data must carefully review the CFPB bulletin and interpretive rule, because none of these details can be found in the regulation itself; they can be found only in the bulletin and interpretive rule.

For lenders that intend to create their own lists based upon the HUD data, but that have not finalized their list-generating tool before the effective date of the rule, the CFPB bulletin offers the following guidance:

"[L]enders . . . have informed the Bureau that they must undertake significant development of compliance systems to ensure that lists are generated in compliance with the RESPA Homeownership Counseling Amendments and the November interpretive rule. The Bureau understands that the systems development may take approximately six months. Thus, these lenders appear unable to provide the lists . . . in time for the rule’s January 10, 2014 effective date.

Accordingly, while lenders are incorporating . . .  list instructions into their systems, they may direct borrowers to the Bureau’s housing counseling agency website to obtain a list of housing counselors, using the format and text suggested below, These steps, if taken by lenders in good faith while they are building their systems or are working with vendors to build systems, would achieve the goals of the regulation and would not raise supervisory or enforcement concerns. Following is the suggested text to be used for this interim procedure:

'Housing counseling agencies approved by the U.S. Department of Housing and Urban Development (HUD) 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.

If you are interested in contacting a HUD-approved housing counseling agency in your area, you can visit the Consumer Financial Protection Bureau’s (CFPB) website,, and enter your zip code.

You can also access HUD’s housing counseling agency website via

For additional assistance with locating a housing counseling agency, call the CFPB at 1-855-411-CFPB (2372).'"

If you want to see what other people are saying about these issues, you might be interested in looking at the following:

Tags: Homeownership Counselor List, Mortgage Lending


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