CFPB Regulation B (12 CFR 1002), which implements Equal Credit Opportunity Act (ECOA), requires mortgage lenders to make disclosures when soliciting and originating mortgage loans. The table below lists the Regulation B related documents and disclosures that are applicable for consumer purpose residential mortgage loans. The list is not exhaustive since additional or alternate documentation may be applicable or used in certain circumstances.
|Application Form||Form||Yes||All mortgage loans||§1002.4 (c)||N.A.||Written|
Notice of Action Taken, which can be:
||Disclosure||Yes||All mortgage loans||§1002.9 (a)||Yes||Written|
|Statement of Specific Reasons or the Action Taken||Disclosure||Yes||Declined applications||§1002.9 (a) (2)||Yes||Written|
|ECOA Notice||Disclosure||Yes||Declined applications||§1002.9 (b) (1)||Yes||Written|
|Appraisal Disclosure||Disclosure||Yes||First lien loan applications for which an appraisal was developed||§1002.14 (a) (2)||Yes||Written|
|Appraisal or Other Written Valuations||Report||Yes||First lien loan applications for which an appraisal was developed||§1002.14 (a) (1)||Yes||Written|
|Appraisal Waiver Letter||Letter||No. For optional use to demonstrate compliance||First lien loan applications for which an appraisal was developed||§1002.14 (a) (1)||Yes||Oral or Written|
|Acknowledgement of Receipt of Appraisal||Letter||No. For optional use to demonstrate compliance||First lien loan applications for which an appraisal was developed||N.A.||N.A.||Oral or Written|
As per Regulation B the following disclosures are required to be included in the application form.
The following disclosures are required when the lender is inquiring about the race, color, religion, national origin, or sex of an applicant or any other person for the purpose of self-test that meets the requirements of §1002.15.
|Sex||If the application form is requesting an applicant to designate a title on the application form (such as Ms., Miss, Mr., or Mrs.), then the lender must disclose on the application form that the designation of a title is optional.||§1002.5(b)(2)|
|Marital Status||A lender may inquire about the applicant's marital status by using only the terms married, unmarried, and separated. A lender may disclose that the category unmarried includes single, divorced, and widowed persons.||§1002.5(d)(1)|
|Disclosure about income from alimony, child support, or separate maintenance||If the lender inquires whether income stated in an application is derived from alimony, child support, or separate maintenance payments, then the lender must disclose to the applicant that such income need not be revealed if the applicant does not want the lender to consider it in determining the applicant's creditworthiness.||§1002.5(d)(2)|
|Government Monitoring Information (HMDA)||The lender must inform the applicant(s) that the information regarding ethnicity, race, sex, marital status, and age is being requested by the Federal Government for the purpose of monitoring compliance with Federal statutes that prohibit creditors from discriminating against applicants on those bases. The creditor shall also inform the applicant(s) that if the applicant(s) chooses not to provide the information, the creditor is required to note the ethnicity, race and sex on the basis of visual observation or surname.||§1002.13(c)|
In terms of the format of the application disclosures, §1002.4 states:
Any disclosure required by regulation B that is provided in writing, must be provided in a clear and conspicuous manner. Except for disclosures required on an application (§1002.5 and §1002.13), the disclosures should be in a form that the applicant may retain.
Any Regulation B disclosure that is required to be provided in writing can be provided to the applicant in electronic form as long as it provided in compliance with the requirements of E-Sign Act.
Disclosures may be made in languages other than English, provided they are available in English upon request.
The general record retention requirement of Regulation B for consumer purpose loans is to maintain the application, action taken, and other related information and documents for at least 25 months. Our recommendation is to retain the information in the loan file for as long as the loan is current. In case of cancelled, withdrawn, and declined loan applications, the lender should retain the documents for at least 25 months from date of action taken. Additional record retention requirements may apply in cases of enforcement proceedings, commercial purpose applications, self-tests, and other cases.
Updated: Jun 15, 2014