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In the September 17, 2012 issue of the Federal Register (77 FR 57200), the Bureau of Consumer Financial Protection (CFPB) published a proposed rule that would amend Regulation X (RESPA) to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) provisions regarding mortgage loan servicing.

In a unanimous decision decided May 24, 2012, in Freeman, et al. v. Quicken Loans, Inc., 132 S.Ct. 2034 (2012), the U.S. Supreme Court refused to give deference to HUD’s undivided unearned fee interpretation expressed in Statement of Policy 2001-1 and ruled that Section 8(b) of RESPA (12 U.S.C. §2607(b))1 does not prohibit a settlement service provider from charging an unearned fee when the provider retains the entire fee.

In the July 11, 2011 Federal Register, the Department of Housing and Urban Development (HUD) published a final rule (“July 2011 rule”) that makes technical corrections and clarifying amendments to HUD’s Regulation X final rule that became effective on January 1, 2010 (“January 2010 rule”). The effective date of the July 2011 rule is August 10, 2011. This memorandum addresses the July 2011 rule only as it relates to the Good Faith Estimate (GFE) and HUD-1/1A Settlement Statements. As to the other corrections and amendments made by the July 2011 rule, they are more in the nature of technical corrections and are not addressed in this memorandum.

In the December 1, 2010 issue of the Federal Register, HUD provided guidance by answering certain questions raised in the public comments HUD received since publishing its Interpretative Rule in the June 25, 2010 issue of the Federal Register regarding the propriety under Section 8 of RESPA of compensation paid by a home warranty company (HWC) to a real estate broker or agent in connection with the sale of a homeowner warranty to a homebuyer or seller in a transaction involving a federally related mortgage loan. The Interpretative Rule was the subject of our memorandum of the same date published on our Website www.bmandg.com.

In the November 24, 2010, issue of the Federal Register (75 F.R. 71724), the Department of Housing and Urban Development (HUD) published Notice that it is considering issuing RESPA guidance regarding warehouse lending and other financing mechanisms used to fund federally related mortgage loans. HUD states that it is seeking information on the current state of warehouse lending and how that method of funding currently operates within residential real estate mortgage transactions and wants input from the mortgage lending industry and others. To accomplish this, the Notice poses ten questions, some of which contain follow-up questions. Those persons interesting in responding to the Notice, however, are not limited to answering these questions and may provide any relevant information regarding warehouse lending and other mechanisms currently used to fund federally related mortgage loans.

In today’s Federal Register, HUD issued the following Interpretative Rule on compensation paid by a home warranty company (HWC) to a real estate broker or agent in connection with the sale of a homeowner warranty to a homebuyer or seller in a transaction involving a federally related mortgage loan: (1) A payment by an HWC for marl

In today’s Federal Register, HUD published the above ANPR to solicit comments that can be used for future revision of the definition of “required use” contained in Regulation X (24 CFR 3500.2(b)). If you do not want the debacle the lending community experienced when HUD attempted to revise the required use definition in its November 17, 2008 final rule (HUD withdrew this revised definition by final rule published May 15, 2009), we urge you to comment on this ANPR before the September 1, 2010 due date.

On April 2, 2010, HUD released New RESPA Rule FAQs, an update to the January 28, 2010, FAQs. The April 2, 2010, FAQs may be found, in their entirety, via the following link http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs422010.pdf and some of the updates within the FAQs are briefly addressed below: 1. GFE, General, #33 & #34 (pgs. 11-12). These two FAQs address preapprovals. HUD states that a preapproval is never to be used as a substitute for a GFE, and that the RESPA rules do not address preapprovals. HUD reiterates that once the loan originator has the information that triggers a GFE, they must still provide the GFE. A lender may never issue only a preapproval for a refinance loan; the lender must also issue a GFE. 2. GFE, General, #35 & #36 (pg. 12). These two FAQs address the use of a worksheet without a GFE and in conjunction with the GFE. They clarify that a worksheet may be used provided that the worksheet does not look like a GFE and does not lead the consumer to believe it is a GFE. The worksheet may be used without a GFE if the consumer has not provided the information necessary to generate a GFE. The worksheet may also be used in conjunction with a GFE, but never in lieu of a GFE.