HOEPA Regulation X Supporting Statement

CONSUMER FINANCIAL PROTECTION BUREAU
INFORMATION COLLECTION REQUEST – SUPPORTING STATEMENT
HOMEOWNERSHIP COUNSELING AMENDMENTS TO THE REAL ESTATE
SETTLEMENT PROCEDURES ACT (Regulation X) 12 CFR 1024
(OMB CONTROL NUMBER: 3170-0025)
The Consumer Financial Protection Bureau (Bureau or CFPB) is dividing certain proposals to
amend the Bureau’s Regulations X and Z into separate Information Collection Requests (ICRs) in the
Office of Management and Budget (OMB) system (accessible at www.reginfo.gov) to ease the public’s
ability to view and understand the individual proposals. Subsequent to the finalization of the rules, CFPB
anticipates that it will recombine the portions of Regulations Z and X that are broken out in the
reginfo.gov system into the existing control numbers for Regulations X and Z. CFPB respondents should
continue to use the 3170-0015 control number for Regulation Z and 3170-0016 control number for
Regulation X throughout this time.
TERMS OF CLEARANCE: Pursuant to 5 CFR 1320.11(c), OMB files this comment on this
information collection request (ICR). In accordance with 5 CFR 1320, OMB is withholding
approval at this time. The agency shall examine public comment in response to the NPRM and
will include in the supporting statement of the next ICR--to be submitted to OMB at the final
rule stage—a description of how the agency has responded to any public comments on the ICR,
including comments on maximizing the practical utility of the collection and minimizing the
burden.
A. JUSTIFICATION
1. Circumstances Necessitating the Data Collection
Certain disclosures are required by the Real Estate Settlement Procedures Act (RESPA) of 1974,
12 U.S.C. 2601 et seq., as amended by Section 461 of the Housing and Urban-Rural Recovery Act of
1983 (HURRA), and other various amendments. RESPA’s 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 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
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The CFPB does not consider the Special Information Booklet that Regulation X currently requires lenders to distribute to
applicants for first-lien purchase money mortgages to be an information collection under 5 CFR 1320.3(c). HUD had
previously classified the Special Information Booklet as an information collection with minimal burden.

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 applicants for 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 its final rule issued on January 10, 2013 (2013 HOEPA
Final Rule or Final Rule), the CFPB is revising Regulation X to require lenders to provide a list of
homeownership 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, as
explained above. Lenders make these disclosures to applicants of federally related mortgage
loans. Disclosures are not submitted to the CFPB.
Under the 2013 HOEPA Final Rule, lenders will be required to give each applicant for
a federally related mortgage loan a clear and conspicuous written list of homeownership
counseling organizations that provide relevant counseling services in the loan applicant’s
location. Under the 2013 HOEPA Final Rule, the homeownership counselor list must be
provided to all applicants for purchase money mortgages, refinancings, home-equity mortgage
loans, and home-equity lines of credit, except applicants for reverse mortgage transactions
subject to 12 CFR 1026.33(a) or for transactions secured by a consumer’s interest in a
timeshare plan. 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).
3. Use of Information Technology
This third-party disclosure described above may be submitted to consumers
electronically. Additionally, most disclosures are computer generated. To facilitate
compliance and minimize burden, the CFPB will require that lenders obtain the counseling list
from either a website maintained by the Bureau where they can input certain information (e.g.,
the loan applicant’s zip code and the type of loan) to generate the requisite list, or from data
made available by the Bureau or HUD for lenders to use in complying with this requirement.
4. Efforts to Identify Duplication
This information collection does not duplicate any other Federal effort. In order to
prevent duplication, the proposed rule exempts reverse mortgage lenders that provide
applicants with a HUD-required list of HECM counseling resources.
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Dodd-Frank Act § 1450.

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5. Efforts to Minimize Burdens on Small Entities
Out of the estimated total 14,742 respondents, the Bureau estimates that about 67
percent of respondents are small entities. As noted in the 2013 HOEPA Final Rule, the CFPB
will require that lenders obtain the required counseling list from either a website maintained by
the Bureau where they can input certain information (e.g., the loan applicant’s zip code and the
type of loan) to generate the requisite list, or from data made available by the Bureau or HUD
for lenders to use in complying with this requirement. The counseling list could then be
transmitted to the loan applicant electronically or in hard copy. By creating and maintaining
the website and by providing data that lenders can alternatively use to generate the list, the
CFPB is seeking to reduce the burden of this information collection and, more specifically, the
time and resources necessary to compile and distribute the housing counselor list.
6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
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
Prior to issuing the August 2012 proposed rule, the CFPB consulted with HUD and other Federal
agencies consistent with section 1022 of the Dodd-Frank Act. On August 15, 2012, the CFPB published
a notice of proposed rulemaking in the Federal Register, which included a request for public comment
on the Paperwork Reduction Act analysis.
As discussed in the Preamble to the Final Rule, the Bureau received a few comments in response
to this request that addressed the paperwork burden of providing a homeownership counseling list in
connection with each mortgage loan application, as required by the Bureau’s amendments to Regulation
X. For example, one large bank stated that the new counselor list requirement would require manually
generating a separate list for each applicant, which the commenter argued would add to its paperwork
burden. Other commenters generally asserted that the Bureau underestimated the paperwork burden that
will accompany generating and providing a counselor list in connection with every mortgage application.
In response to these public comments, and as described in the Preamble to the Final Rule, the
Bureau modified proposed § 1024.20 in the 2013 HOEPA Final Rule to reduce the burden and to
maximize the practical utility of the collection. For example, the Bureau is exempting some types of
loans from the list requirement, reducing uncertainty regarding compliance with the requirement for
lenders through the use the website portal that the Bureau will provide, and giving lenders the option to
comply through the use of data they can import into their systems to create the list.

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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 Final Rule, the CFPB generally accounts for the paperwork burden for all
respondents that will be required to comply with the amendments to Regulation X in the Final
Rule. Specifically, for the purposes of this PRA analysis, the CFPB’s respondents under
Regulation X are an estimated 11,955 depository institutions and 2,787 non-depository
institutions that are estimated to originate open- or closed-end mortgages (i.e., 14,742
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
intermediation industries. To obtain fully-loaded hourly rates, the CFPB divides hourly wages by
66.6%. 3 The fully-loaded hourly labor cost by occupation (rounded to the nearest dollar) is given below.

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

Depository
Institutions
$116
$46
$48
$26
$39
$55

Non-depository
Institutions
$114
$52
$48
$26
$41
$60

A. Provision of List of Homeownership Counselors or Counseling Organizations to Applicants for
Federally Related Mortgage Loans
i. One-time burden
Reviewing the regulation
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Bureau of Labor Statistics data indicate that in Q4 2011 wages accounted for 66.6% of the total cost of compensation for
credit intermediation and related activities.

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The CFPB estimates that, for each covered person, one attorney and one compliance
officer will 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 will 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 an equal number of loan processors will need to receive 7.5 minutes (0.125
hours) of training. In addition, the CFPB estimates that one trainer could train ten loan officers
or loan processors at a time, for an additional one hour of trainer time per ten hours of trainee
time. The CFPB estimates that there are approximately 64,000 loan officers at the depository
institutions and about 24,000 at non-depository institutions that will need training and that the
same number of loan processors will need to be trained. Given the estimates, the estimated
training-hours burden is approximately 24,300 hours, and the associated labor costs are
estimated to be roughly 900,000 dollars. 6
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 nearly 14.8 million applications for the universe of relevant respondents, the
CFPB estimates the burden will be about 246,000 hours (nearly 14.8 million applications * (1/60

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The hours burden is calculated as (2*0.125 hours) * [(11,955 depository institutions) + (2,787 non-depository institutions)].
To illustrate, using hourly wages rounded to the nearest dollar, this estimate is calculated as (0.125 hours) *{(11,955
depository institutions) * [($116/hr. average wage for attorney at depository institution) + ($46/hr. average wage for
compliance officer at depository institution)] + (2,787 non-depository institutions) * [($114/hr. average wage for attorney at
non-depository institution) + ($52/hr. average wage for compliance officer at non-depository institution)]}.
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To illustrate, rounding the number of loan officers and loan processors to the nearest thousand and hourly wages to the
nearest dollar, the hours burden is estimated as (0.125 training hours) * [(64,000 loan officers at depository institutions) +
(24,000 loan officers at non-depository institutions) + (64,000 loan processors at depository institutions to be trained) +
(24,000 loan processors at non-depository institutions to be trained)] * (1.1 to account for trainer hours). The associated costs
burden is calculated as (0.125 training hours) * {[(64,000 loan officers at depository institutions) * ($48/hr. average wage for
loan officer at depository institution) + (64,000 loan processors at depository institutions to be trained) * ($26/hr. average
wage for loan processor at depository institution) + (1/10) * (64,000 loan officers at depository institutions + 64,000 loan
processors at depository institutions to be trained) * ($39/hr. average wage for trainer at depository institutions)] + [(24,000
loan officers at non-depository institutions) * ($48/hr. average wage for loan officer at non-depository institution) + (24,000
loan processors at non-depository institutions to be trained) * ($26/hr. average wage for loan processor at non-depository
institution) + (1/10) * (24,000 loan officers at non-depository institutions + 24,000 loan processors at non-depository
institutions to be trained) * ($41/hr. average wage for trainer at non-depository institutions)]}. Estimates cited in the main text
may differ from these illustrative calculations since they are based on unrounded estimates of wages, loan officers, and loan
processors.
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hour)) and associated labor cost of 6.3 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 11,955 depository institutions and 2,787 non-depository institutions
subject to the CFPB’s administrative enforcement authority receive nearly 14.8 million
applications for open-end or closed-end mortgages. Given this, the CFPB estimates the total
burden across all relevant respondents will be about 1.48 million dollars (($0.10) * 14.8 million
applications).
14. Estimated Cost to the Federal Government
There are no additional costs to the Federal Government.
15. Program Changes or Adjustments
The 2013 HOEPA Final Rule implements in Regulation X the information collection
requirements described above. The 2013 HOEPA Final Rule 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 to obtain a new expiration date before the old one expires.
18. Exceptions to the Certification Requirement
None.
Note: The following paragraph applies to all of the collections of information in this
submission:

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Using application counts rounded to the nearest 100,000 and hourly wages rounded to the nearest dollar, for illustration, the
labor costs are estimated as (1/60) * [(10.6 million applications at respondent depository institutions) * ($26/hr. average wage
for loan processor at depository institution) + (4.1 million applications at respondent non-depository institutions) * ($26/hr.
average wage for loan officer at non-depository institution)]. Estimates cited in the main text may differ from this illustrative
calculation since they are based on unrounded estimates of wages and applications.

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An agency may not conduct or sponsor, and, notwithstanding any other provision of
law, 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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