HOEPA Reg X PRA SS FINAL

CONSUMER FINANCIAL PROTECTION BUREAU
INFORMATION COLLECTION REQUEST – SUPPORTING STATEMENT
REAL ESTATE SETTLEMENT PROCEDURES ACT (REGULATION X) 12 CFR 1024
(OMB CONTROL NUMBER: 3170-XXXX)
The Bureau of Consumer Financial Protection (CFPB) is providing a supplement to its previous
supporting statement for Regulation X. This supplement addresses the information collection
requirements in Regulation X that are affected by the CFPB’s proposed change as described below.
A. JUSTIFICATION
1. Circumstances Necessitating the Data Collection
Certain disclosures are required by the Real Estate Settlement Procedures Act (RESPA) of 1974,
as amended by Section 461 of the Housing and Urban-Rural Recovery Act of 1983 (HURRA), and other
various amendments. The statute is found at 12 U.S.C. 2601 et seq. The implementing regulations were
historically published by the Department of Housing and Urban Development (HUD) at 24 CFR 3500. In
light of the transfer of HUD’s rulemaking authority for RESPA to the Bureau of Consumer Financial
Protection (CFPB), the CFPB adopted an interim final rule (Interim Final Rule) recodifying HUD’s
Regulation X at 12 CFR 1024 to reflect the transfer of authority and to help facilitate compliance with
RESPA and its implementing regulations to help prevent confusion regarding regulatory and supervisory
authority.
Required disclosures include: the Good Faith Estimate (GFE), the HUD-1/HUD-1A Settlement
Statements, the Servicing Disclosure Statement, and, as applicable, the Servicing Transfer Disclosure.
Other disclosures may be required under certain circumstances and include: the Initial Escrow Account
Statement, the Annual Escrow Account Statement, and the Affiliated Business Arrangement Disclosure.1
This collection helps to protect consumers in several respects. The GFE and HUD-1/HUD-1A Settlement
Statements enable consumers to compare estimated settlement costs with actual settlement costs. The
Affiliated Business Arrangement Disclosure helps to protect borrowers from unnecessarily high
settlement service charges due to the settlement service provider’s use of an affiliated provider.
Disclosures related to the servicing of the mortgage loan help to protect consumers if the servicing of the
loan could be or is transferred. Disclosures related to consumers’ escrow accounts help to protect them
from unnecessarily high escrow charges.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Pub. L.
111-203, amended RESPA to mandate that lenders provide to potential borrowers of federally related
mortgage loans a “reasonably complete or updated list of homeownership counselors who are certified
pursuant to section 106(e) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) and
located in the area of the lender.”2 Accordingly, through a proposed rule published in the Federal
Register in August 2012, the CFPB is proposing to revise Regulation X to require lenders to provide a list
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The CFPB understands that the Special Information Booklet that Regulation X currently requires lenders to distribute to
applicants for first-lien purchase money mortgages would not be an information collection because it does not require any
information that is specific to the lenders or the transaction. HUD had previously classified the Special Information Booklet
as an information collection with minimal burden.
2
Dodd-Frank Act § 1450.

of homeownership counselors or counseling organizations to applicants for federally related mortgage
loans.
2. Use of the Information
The third party disclosures in this collection are required by statute and regulations.
The CFPB expects to make further explanations of RESPA available through its website,
http://www.consumerfinance.gov. Lenders make these disclosures to applicants of federally
related mortgage loans. Disclosures are not submitted to the federal government.
Under the proposed rule, lenders would be required to give applicants for a federally
related mortgage loan a clear and conspicuous written list of five homeownership counselors or
counseling organizations located in the zip code of the applicant, or the nearest zip codes to the
applicant. Under the proposed rule, the homeownership counselor list must be provided to all
applicants for purchase money mortgages, refinancings, home-equity mortgage loans, homeequity lines of credit, and reverse mortgages, except applicants for a Home Equity Conversion
Mortgage (HECM), as defined in 12 U.S.C. 1725z-20(b)(3), if the lender provides the applicant
a HUD-required list of HECM counselors or counseling agencies. The lender would have to
provide the list no later than three business days after the lender, mortgage broker, or dealer
receives a loan application (or information sufficient to complete a loan application) under the
proposal.
3. Use of Information Technology
This third party disclosure described above may be submitted to consumers
electronically. Additionally, most disclosures are computer generated. The CFPB expects that
lenders will be able to access a website where they could type in the loan applicant’s zip code
to generate the requisite list, which could then be transmitted to the loan applicant either
electronically or in hard copy.
4. Efforts to Identify Duplication
This information collection does not duplicate any other Federal effort. In order to
prevent duplication, the proposed rule exempts HECM lenders that provide applicants with a
HUD-required list of HECM counseling resources. In addition, as discussed in the CFPB’s
supplement to its Supporting Statement for Regulation Z, 12 CFR part 1026 (also filed with
OMB today), the CFPB is proposing that creditors who satisfy the homeownership counselor
list discussed herein will be deemed to have complied with the proposed requirements under
Regulation Z to provide a list of homeownership counselors to borrowers in high-cost
mortgages and first-time borrowers in negatively-amortizing mortgage loans.
5. Efforts to Minimize Burdens on Small Entities
As noted in the CFPB’s proposed rule, the CFPB expects that lenders will be able to
access a website that would allow them to type in the loan applicant’s zip code to generate the
requisite housing counselor list, which could then be transmitted to the loan applicant

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electronically or in hard copy. This should minimize burden by reducing the time and
resources necessary to compile and distribute the housing counselor list.
6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
This information is not submitted to the federal government. These third-party
disclosures are required by statute, 12 U.S.C. 2601 et seq., and regulations. The burdens on
respondents are the minimum necessary to comply with the statute, and to assist borrowers in
obtaining information about available homeownership counseling resources.
7. Circumstances Requiring Special Information Collection
Information is not reported to the CFPB. The collection of information in Regulation X
is consistent with the applicable guidelines contained in 5 CFR 1320.5(d)(2).
8. Consultation Outside the Agency
The CFPB published a notice of proposed rulemaking in the Federal Register for public
comment. The comment period for the Paperwork Reduction Act analysis will expire on October 15,
2012. Prior to issuing the proposed rule, the CFPB consulted with HUD and other Federal agencies
consistent with section 1022 of the Dodd-Frank Act.
9. Payments or Gifts to Respondents
Not applicable.
10. Assurances of Confidentiality
There are no assurances of confidentiality provided to respondents.
11. Justification for Sensitive Questions
There is no information of a sensitive nature being requested.
12. Estimated Burden of Information Collection
Under the proposed rule, the CFPB generally would account for the paperwork burden
for all respondents that will be required to comply with the amendments to Regulation X in the
proposed rule. Specifically, for the purposes of this PRA analysis, the CFPB’s respondents
under Regulation X are an estimated 12,392 depository institutions and 2,515 non-depository
institutions that are estimated to originate open- or closed-end mortgages (i.e., 14,907
institutions in total).
The CFPB calculates labor costs by applying appropriate hourly cost figures to the burden hours
described below. The hourly rates used are based on occupation-specific average earnings data from the
Bureau of Labor Statistics for workers in the depository credit intermediation and non-depository credit

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intermediation industries. To obtain fully-loaded hourly rates, the CFPB divides hourly wages by
67.5%.3 The fully-loaded hourly labor cost by occupation (rounded to the nearest dollar) is given below.

Occupation
Attorneys
Compliance officers
Loan officers
Training and development specialists
Computer and IT staff

Depository
Institutions
$114
$44
$45
$38
$53

Non-depository
Institutions
$113
$49
$47
$40
$58

A. Provision of List of Homeownership Counselors or Counseling Organizations to Applicants for
Federally Related Mortgage Loans
i. One-time burden
Reviewing the regulation
The CFPB estimates that, for each covered person, one attorney and one compliance
officer would each take 7.5 minutes (0.125 hours) to read and review the sections of the
proposed rule that describe the homeownership counselor list requirement, based on the length
of the sections. The burden allocated to the CFPB for respondents subject to the proposed
changes to Regulation X is roughly 3,700 hours.4 Based on the respective labor cost of
attorneys and compliance officers, the associated labor cost is roughly 300,000 dollars.5
Training
Covered persons would incur one-time costs associated with training employees
regarding the list of homeownership counselors or counseling organizations. The CFPB
estimates that each loan officer or other loan originator will need to receive 7.5 minutes (0.125
hours) of training, and that one trainer could train ten loan officers at a time, for an additional
one hour of trainer time per ten hours of trainee time. The CFPB estimates that there are
approximately 72,000 loan officers at the depository institutions and about 21,000 at nondepository institutions that would need training. Given the estimates, the estimated traininghours burden is approximately 12,700 hours, and the associated labor costs are estimated to be
roughly 570,000 dollars.6
3

Bureau of Labor Statistics data indicate that in Q4 2010 wages accounted for 67.5% of the total cost of compensation for
credit intermediation and related activities.
4
The hours burden is calculated as (2*0.125 hours) * [(12,392 depository institutions) + (2,515 non-depository institutions)].
5
This estimate is calculated as (0.125 hours) *{(12,392 depository institutions) * [($114/hr. average wage for attorney at
depository institution) + ($44/hr. average wage for compliance officer at depository institution)] + (2,515 non-depository
institutions) * [($113/hr. average wage for attorney at non-depository institution) + ($49/hr. average wage for compliance
officer at non-depository institution)]}.
6
Rounding the number of loan officers to the nearest thousand, the hours burden is estimated as (0.125 training hours) *
[(72,000 loan officers at depository institutions) + (21,000 loan officers at non-depository institutions)] * (1.1 to account for
trainer hours). The associated costs burden is calculated as (0.125 training hours) * {[(72,000 loan officers at depository

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ii. Ongoing burden
The CFPB estimates that, on average, covered persons will require 1 minute to produce and to
provide the list of homeownership counselors or counseling organizations to each applicant.
Given the estimated 15.5 million applications for the universe of relevant respondents, the CFPB
estimates the burden would be about 260,000 hours (15.5 million applications * (1/60 hour)) and
associated labor cost of 11.9 million dollars.7
13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
The CFPB estimates that respondents will incur a burden of $0.10 dollars per
application to produce the list of homeownership counselors or counseling organizations. The
CFPB estimates that the 12,392 depository institutions and 2,515 non-depository institutions
subject to the CFPB’s administrative enforcement authority receive roughly 15.5 million
applications for open-end or closed-end mortgages. Given this, the CFPB estimates the total
burden across all relevant respondents would be 1.55 million dollars (($0.10) * 15.5 million
applications).
14. Estimated Cost to the Federal Government
As the CFPB does not collect any information, the cost to the CFPB is negligible.
15. Program Changes or Adjustments
The CFPB’s proposal would implement in Regulation X the information collection requirements
described above. The CFPB’s proposal makes no changes to the other information collections in
Regulation X since the last OMB approval.
16. Plans for Tabulation, Statistical Analysis, and Publication
The results of the information collection will not be published.
17. Display of Expiration Date
We believe that displaying the OMB expiration date is inappropriate because it could
cause confusion by leading consumers to believe that the regulation sunsets as of the expiration
date. Consumers are not likely to be aware that the CFPB intends to request renewal of OMB
approval and obtain a new expiration date before the old one expires.

institutions) * ($45/hr. average wage for loan officer at depository institution) + (1/10) * (72,000 loan officers at depository
institutions) * ($38/hr. average wage for trainer at depository institutions)] + [(21,000 loan officers at non-depository
institutions) * ($47/hr. average wage for loan officer at non-depository institution) + (1/10) * (21,000 loan officers at nondepository institutions) * ($40/hr. average wage for trainer at non-depository institutions)]}.
7
Using application counts rounded to the nearest 100,000, the labor costs are estimated as (1/60) * [(12.0 million applications
at respondent depository institutions) * ($45/hr. average wage for loan officer at depository institution) + (3.6 million
applications at respondent non-depository institutions) * ($47/hr. average wage for loan officer at non-depository institution)].

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18. Exceptions to the Certification Requirement
None.
Note: The following paragraph applies to all of the collections of information in this
submission:
An agency may not conduct or sponsor, and a person is not required to respond to, a
collection of information unless the collection of information displays a valid OMB control
number.

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