Amendments to Regulation X, the Real Estate Settlement Procedures Act Regulation (Subordinate Liens); Technical Amendments

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Housing-Federal Housing

Commissioner

24 CFR Part 3500

[Docket No R-94-1653; FR-3382-F-05]

RIN 2502-AG13

Amendments to Regulation X, the Real Estate Settlement Procedures

Act Regulation (Subordinate Liens); Technical Amendments

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing

Commissioner, HUD.

ACTION: Final rule; technical amendments.

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SUMMARY: The Department is publishing technical amendments to clarify

the final rule on Amendments to Regulation X, the Real Estate

Settlement Procedures Act Regulation (Subordinate Liens), published

February 10, 1994 (59 FR 6505), and corrected on March 30, 1994 (59 FR

14748).

EFFECTIVE DATE: August 9, 1994.

FOR FURTHER INFORMATION CONTACT: Grant E. Mitchell, Senior Attorney for

RESPA, Office of General Counsel, Room 10252 (202) 708-1550, Department

of Housing and Urban Development, 451 Seventh Street, SW, Washington,

D.C. 20410-0500. The TDD number is (202) 708-4594. (These are not toll-

free numbers.)

SUPPLEMENTARY INFORMATION:

Justification for Final Rulemaking

In general, the Department publishes a rule for public comment

before issuing a rule for effect, in accordance with its own

regulations on rulemaking, 24 CFR part 10. However, part 10 does

provide for exceptions from that general rule where the agency finds

good cause to omit advance notice and public participation. The good

cause requirement is satisfied when prior public procedure is

``impracticable, unnecessary, or contrary to the public interest.'' (24

CFR 10.1) The Department finds that good cause exists to publish this

rule for effect without first soliciting public comment, in that prior

public procedure is unnecessary, and not required, because the rule is

in the nature of a clarification that reflects the Department's

interpretation of existing requirements.

Background and Justification for Effective Date

On February 10, 1994, the Department issued amendments to its

regulations to implement sections 908 and 951 of the Housing and

Community Development Act of 1992 (Pub. L. 102-550, approved October

28, 1992) (Act). That Act expanded the coverage of RESPA to include

mortgages secured by subordinate liens, and restated the Department's

authority over refinancing transactions. The Department's final rule of

February 10, 1994, adopted certain definitions and disclosure

requirements of the Truth in Lending Act (TILA) and its implementing

regulation, Regulation Z, to minimize the burden on lenders and others

in complying with different or conflicting definitions and disclosure

requirements for transactions also covered by the TILA.

As published, the preamble and the final rule contained material

that might have been misleading, so the Department published a

correction to clarify certain provisions in the rule (59 FR 14748). The

Department has now determined that two additional clarifications of the

final rule would be helpful. Because the final rule has an effective

date of August 9, 1994, the Department is also making these technical

amendments effective on August 9, 1994. A longer period before

effectiveness of these amendments would not benefit the public, and

coinciding effective dates for the rule and amendments may avoid

unnecessary confusion about the rule.

Other Matters

Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)), has reviewed this rule before publication and by

approving it certifies that this rule does not have a significant

economic impact on a substantial number of small entities. The rule is

in the nature of a clarification that merely reflects the Department's

interpretation of existing requirements.

Environmental Impact

Because this rule clarifies a rule published on February 10, 1994

(59 FR 6505), the finding of no significant impact prepared for that

rule remains applicable, and is available for public inspection between

7:30 a.m. and 5:30 p.m. weekdays in the office of the Rules Docket

Clerk, Office of General Counsel, Room 10276, Department of Housing and

Urban Development, 451 Seventh Street, SW, Washington, DC 20410-0500.

Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that the policies

contained in this rule will not have substantial direct effects on

States or their political subdivisions, or the relationship between the

federal government and the States, or on the distribution of power and

responsibilities among the various levels of government. As a result,

the rule is not subject to review under the Order. This rule merely

clarifies the applicable regulatory requirements.

Executive Order 12606, the Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this rule does not have

potential for significant impact on family formation, maintenance, and

general well-being, and, thus, is not subject to review under the

order. No significant change in existing HUD policies or programs will

result from promulgation of this rule, as those policies and programs

relate to family concerns.

Regulatory Agenda

This rule was not listed in the Department's Semiannual Agenda of

Regulations published on April 25, 1994 (59 FR 20424), in accordance

with Executive Order 12866 and the Regulatory Flexibility Act.

List of Subjects in 24 CFR Part 3500

Consumer protection, Housing, Mortgages, Real property acquisition,

Reporting and recordkeeping requirements.

For the reasons set out in the preamble, part 3500 of Title 24 of

the Code of Federal Regulations is amended as set forth below.

PART 3500--REAL ESTATE SETTLEMENT PROCEDURES ACT

1. The authority citation for part 3500 continues to read as

follows:

Authority: 12 U.S.C. 2601 et seq.

2. Section 3500.6 is amended by removing the word ``and'' at the

end of paragraph (a)(3)(ii); by removing the punctuation ``.'' at the

end of paragraph (a)(3)(iii) and replacing it with ``; and''; and by

adding a new paragraph (a)(3)(iv), to read as follows:

Sec. 3500.6 Special information booklet at time of loan application.

(a) * * *

(3) * * *

(iv) Any other federally related mortgage loan whose purpose is not

the purchase of a 1- to 4-family residential property.

* * * * *

3. Section 3500.7 is amended in paragraph (e)(1)(iii) by adding two

new sentences in parentheses after the second sentence, to read as

follows:

Sec. 3500.7 Good faith estimate.

* * * * *

(e) * * *

(1) * * *

(iii) * * * (The lender is not required to keep detailed records of

the percentages of use. Similar language, such as ``X was used

[regularly] [frequently] in our settlements the past year'' is also

sufficient for the purposes of this paragraph.) * * *

* * * * *

Dated: July 18, 1994.

Nicolas P. Retsinas,

Assistant Secretary for Housing-Federal Housing Commissioner.

[FR Doc. 94-17886 Filed 7-21-94; 8:45 am]

BILLING CODE 4210-27-P