diff --git a/common/lib/xmodule/xmodule/capa_module.py b/common/lib/xmodule/xmodule/capa_module.py
index 052f4eefe7..ae7ebc3b78 100644
--- a/common/lib/xmodule/xmodule/capa_module.py
+++ b/common/lib/xmodule/xmodule/capa_module.py
@@ -644,6 +644,8 @@ class CapaDescriptor(RawDescriptor):
     # actually use type and points?
     metadata_attributes = RawDescriptor.metadata_attributes + ('type', 'points')
 
+    template_dir_name = 'problem'
+
     # VS[compat]
     # TODO (cpennington): Delete this method once all fall 2012 course are being
     # edited in the cms
diff --git a/common/lib/xmodule/xmodule/templates/default/empty.json b/common/lib/xmodule/xmodule/templates/default/empty.json
deleted file mode 100644
index be5d368dbc..0000000000
--- a/common/lib/xmodule/xmodule/templates/default/empty.json
+++ /dev/null
@@ -1,5 +0,0 @@
-{
-    "metadata": { "display_name": "Empty" },
-    "data": "",
-    "children": []
-}
diff --git a/common/lib/xmodule/xmodule/templates/default/empty.yaml b/common/lib/xmodule/xmodule/templates/default/empty.yaml
new file mode 100644
index 0000000000..a2fb2b5832
--- /dev/null
+++ b/common/lib/xmodule/xmodule/templates/default/empty.yaml
@@ -0,0 +1,5 @@
+---
+metadata:
+    display_name: Empty
+data: ""
+children: []
diff --git a/common/lib/xmodule/xmodule/templates/problem/multiline.yaml b/common/lib/xmodule/xmodule/templates/problem/multiline.yaml
new file mode 100644
index 0000000000..94df320bfe
--- /dev/null
+++ b/common/lib/xmodule/xmodule/templates/problem/multiline.yaml
@@ -0,0 +1,7 @@
+---
+metadata:
+    display_name: Multiline XML
+data: |
+    <problem>
+    </problem>
+children: []
diff --git a/common/lib/xmodule/xmodule/x_module.py b/common/lib/xmodule/xmodule/x_module.py
index f7560c7a55..cf08a0b7b2 100644
--- a/common/lib/xmodule/xmodule/x_module.py
+++ b/common/lib/xmodule/xmodule/x_module.py
@@ -1,6 +1,6 @@
 import logging
 import pkg_resources
-import json
+import yaml
 import os
 
 from functools import partial
@@ -352,7 +352,7 @@ class ResourceTemplates(object):
 
         for template_file in resource_listdir(__name__, dirname):
             template_content = resource_string(__name__, os.path.join(dirname, template_file))
-            template = json.loads(template_content)
+            template = yaml.load(template_content)
             templates.append(Template(**template))
 
         return templates