12 CFR §1026.34 — Prohibited acts or practices in connection with high-cost mortgages
Regulation Z §1026.34 prohibits enumerated acts and practices for HOEPA high-cost mortgages: contractor-payment routing, refinancing within one year, pre-loan counseling, recommended default, and financing of points and fees.
Verbatim regulatory text
Verbatim provisions from 12 CFR §1026.34 — Prohibited acts or practices in connection with high-cost mortgages — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
12 CFR §1026.34(a)(1) — Home-improvement contract payment routing
(a) Prohibited acts or practices for high-cost mortgages —(1) Home improvement contracts. A creditor shall not pay a contractor under a home improvement contract from the proceeds of a high-cost mortgage, other than:
12 CFR §1026.34(a)(3) — Prohibition on refinancing high-cost mortgage within one year
(3) Refinancings within one-year period. Within one year of having extended a high-cost mortgage, a creditor shall not refinance any high-cost mortgage to the same consumer into another high-cost mortgage, unless the refinancing is in the consumer 's interest. An assignee holding or servicing a high-cost mortgage shall not, for the remainder of the one-year period following the date of origination of the credit, refinance any high-cost mortgage to the same consumer into another high-cost mortgage, unless the refinancing is in the consumer 's interest. A creditor (or assignee) is prohibited from engaging in acts or practices to evade this provision, including a pattern or practice of arranging for the refinancing of its own loans by affiliated or unaffiliated creditors.
12 CFR §1026.34(a)(5)(i) — Pre-loan counseling certification required
(5) Pre-loan counseling —(i) Certification of counseling required. A creditor shall not extend a high-cost mortgage to a consumer unless the creditor receives written certification that the consumer has obtained counseling on the advisability of the mortgage from a counselor that is approved to provide such counseling by the Secretary of the U.S. Department of Housing and Urban Development or, if permitted by the Secretary, by a State housing finance authority.
12 CFR §1026.34(a)(6) — Prohibition on recommending default
(6) Recommended default. A creditor or mortgage broker, as defined in section 1026.36(a)(2) , may not recommend or encourage default on an existing loan or other debt prior to and in connection with the consummation or account opening of a high-cost mortgage that refinances all or any portion of such existing loan or debt .
12 CFR §1026.34(a)(10) — Prohibition on financing points and fees
(10) Financing of points and fees. A creditor that extends credit under a high-cost mortgage may not finance charges that are required to be included in the calculation of points and fees, as that term is defined in § 1026.32(b)(1) and (2) . Credit insurance premiums or debt cancellation or suspension fees that are required to be included in points and fees under § 1026.32(b)(1)(iv) or (2)(iv) shall not be considered financed by the creditor when they are calculated and paid in full on a monthly basis.
12 CFR §1026.34(a)(1) — Home-improvement contract payment routing — enumerated items (chapeau recall fix)
(i) By an instrument payable to the consumer or jointly to the consumer and the contractor; or (ii) At the election of the consumer , through a third-party escrow agent in accordance with terms established in a written agreement signed by the consumer , the creditor, and the contractor prior to the disbursement.