3170-0025 Reg X HEOPA SS Final

BUREAU OF CONSUMER FINANCIAL PROTECTION
PAPERWORK REDUCTION ACT SUBMISSION
INFORMATION COLLECTION REQUEST
SUPPORTING STATEMENT PART A FOR
HOMEOWNERSHIP COUNSELING AMENDMENTS TO THE
REAL ESTATE SETTLEMENT PROCEDURES ACT
(REGULATION X) 12 CFR 1024
(OMB CONTROL NUMBER: 3170-0025)
OMB TERMS OF CLEARANCE:
Not applicable. The Office of Management and Budget (OMB) did not provide Terms of
Clearance when approved this information collection on November 11, 2013.
ABSTRACT:
Regulation X implements the Real Estate Settlement Procedures Act (RESPA), ensures
that consumers are provided with more helpful information about the cost of the mortgage
settlement and protected from unnecessarily high settlement charges caused by certain abusive
practices. Regulation X contains information collections in the form of third party disclosures
and recordkeeping requirements.
This amendment to Regulation X requires lenders to provide mortgage applicants a list
of certified homeownership counselors at or soon after the time of their application. This
requirement is meant to help applicants be informed about the process of applying for a
mortgage, and receive additional non-biased guidance if desired.

1. Circumstances Necessitating the Data Collection
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act),
Pub. L. 111-203, amended Real Estate Settlement Procedures Act (RESPA) of 1974, 12 U.S.C.
2601 et seq., 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.”
The Real Estate Settlement Procedures Act as implemented Regulation X, 12 CFR 1024, in
section 1024.20 requires lenders to provide a list of homeownership counseling organizations to
applicants for federally related mortgage loans.

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2. Use of the Information
Lenders are 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. 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
The homeownership counselor list may be submitted to consumers
electronically.
To facilitate compliance and minimize burden, the CFPB requires 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.
5. Efforts to Minimize Burdens on Small Entities
To facilitate compliance and minimize burden, the CFPB either allows lenders
to 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. 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

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These third-party disclosures are required by statute, 12 U.S.C. 2601 et
seq., and regulations, and are triggered by a submitted application, rather than
being periodic. 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
In accordance with 5 CFR §1320.8(d)(1), the Bureau has published a notice at
Federal Register allowing the public 60 days to comment on this proposed the extension
(renewal) of this currently approved collection of information. No comments were
received. Further and in accordance with 5 CFR §1320.5(a)(1)(iv), the Bureau has also
published a notice in the Federal Register allowing the public 30 days to comment on the
submission of this information collection request to the Office of Management and Budget.
9. Payments or Gifts to Respondents
No payments or gifts are provided to respondents.
10. Assurances of Confidentiality
There is no additional collection of information from consumers in compliance with this
regulation, and hence there is no need for assurances of confidentiality provided.
11. Justification for Sensitive Questions
There is no information of a sensitive nature being requested.

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12. Estimated Burden of Information Collection
Labor Hours: 117,500

Information Collection
Requirement
Provide list of
counseling
organizations
Total hours:
Total labor cost:
CFPB Respondents

No. of
Market
Respondents

Number of
annual
responses
per
respondent

Total
Annual
Responses

Average
Response
Time

Annual
Burden
Hours

Hourly
Rate

Hourly
Costs

13,880

999

13,870,582

0.02

231,176

$45

$10,402,937

231,176
$10,402,937
2,259

CFPB Response share

50.83%

CFPB allocated hours
CFPB allocated labor
cost

117,500
$5,287,497

The total number of respondents – lenders that originate federally related
mortgages – was 13,880 in 2014. 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 million applications for the universe of relevant
respondents, the total burden will be about 230,000 hours with an associated labor cost at $10
million dollars. This number of applications includes: a) applications that are registered in
HMDA 2014; b) CFPB’s estimate for the number of applications for lenders that do not report
to HMDA; c) CFPB’s estimate of the number of applications for Home Equity Lines of Credit
(HELOCs).
The CFPB share of the total burden is 50%, which amounts to 117,500 hours and $5
million annually. This share is obtained as follows:
The CFPB respondent number of 2,259 is made up of two parts: the DI share and the
non-DI share. As of December 2014, there are 145 depository institutions (114 depository
institutions with total assets of more than $10 billion and 31 affiliates) over which CFPB has
primary enforcement authority with respect to Regulation X. Examining HMDA data shows
135 of these institutions taking in just over 3.1 million applications, for which the Bureau takes
burden.
In addition, the CFPB and the FTC generally both have enforcement authority over nondepository institutions for Regulation Z. Therefore, the CFPB has allocated to itself half of the
estimated burden to 2,124 non-depository institutions which originated federally related
mortgages in 2014, for which they had about 6.6 million applications, giving the Bureau

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burden for 3.3 million of these applications.
To arrive at the final estimate for annual responses, HELOCs were added into
consideration, for which data is sparsely reported in HMDA. For entities under the Bureau’s
enforcement jurisdiction, this adds about six hundred thousand responses.
13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
The CFPB estimates that respondents will incur a burden of $0.01 dollars per
application to produce the list of homeownership counselors or counseling
organizations. Primarily this is a cost of making a paper copy of the list; to the extent
that some lenders use electronic means of delivering the disclosure, the actual value of
material costs will be smaller.
Description of Costs (O&M)

Per Unit Costs

Quantity

Costs

Print a list of counseling organizations (one page)

$0.01

13,870,582

$138,705

Total Burden Costs:

$138,705

14. Estimated Cost to the Federal Government
As the Bureau does not collect any information, there are no costs to the Bureau
associated with this information collection. While the Bureau does maintain a website
which respondents can use, we do not account for staff time used to build and maintain
the website for PRA purposes; only extra costs incurred by the Bureau are counted,
which are zero for this OMB number.

15. Program Changes or Adjustments
Total
Respondents
Total Annual Burden
Requested
Current OMB Inventory
Difference (+/-)
Program Change
Discretionary
New Statute
Violation
Adjustment

Annual Responses

2,259
14,742
-12,483
0
0
0
0
-12,483

7,049,996
14,911,600
-7,861,604
0
0
0
0
-7,861,604

Burden Hours

117,500
274,667
-157,167
0
0
0
0
-157,167

Cost Burden (O &
M)
$138,705
$2,680,280
-$2,541,575
$0
$0
$0
$0
-$2,541,575

The new estimates calculated by the CFPB reflect improved calculations done on the
market. In particular, the previous estimates were for the entire market and not just for those
respondents under the CFPB enforcement authority. Therefore the total respondents, annual
respondents, and burden hours are lower to reflect those calculations. While the cost burden is
also lower to reflect the actual number of CFPB respondents, we also estimate a lower cost per

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printed disclosure from $.10 to $.01. This is both because we believe many respondents send this
list electronically and therefore have no additional costs, and for those that do print it, the cost is
extremely minimal.
16. Plans for Tabulation, Statistical Analysis, and Publication
The results of the information collection will not be published.
17. Display of Expiration Date
The OMB control number and expiration date associated with this PRA submission will
be displayed on the Federal government’s electronic PRA docket at www.reginfo.gov, as well as
in the Federal Register Notice of the submission.
18. Exceptions to the Certification Requirement
The Bureau certifies that this collection of information is consistent with the requirements
of 5 CFR 1320.9, and the related provisions of 5 CFR 1320.8(b)(3) and is not seeking an
exemption to these certification requirements.

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