The Consumer Financial Protection Bureau published an official list of rural and underserved counties for 2014, so lenders know which financial firms are exempt from key mortgage regulations.
Currently, a new escrow provision tied to the Truth in Lending Act requires creditors to establish escrow accounts on higher-priced loans for a minimum of five years. Yet, loans issued by smaller creditors in rural and underserved counties remain exempt.
The new CFPB list allows lenders to know for sure when they are exempt or required to set up an escrow account.
Furthermore, the ability-to-repay and qualified mortgage standards take effect next January. Smaller creditors in rural or underserved counties will be exempt from a provision that disqualifies mortgages with balloon payments from obtaining qualified mortgage status. Knowing for sure, which banks qualify, is essential.
The CFPB's list is designed to let lenders know for sure.
In general, rural counties are defined by the United States Department of Agriculture Economic Research Service.
Underserved counties are defined each year through data collected under the Home Mortgage Disclosure Act.