CFPB Republishes RESPA Regulations

By: Holly Spencer Bunting

While the CFPB took over rulemaking and enforcement authority for RESPA on July 21, 2011, that transfer of authority will soon be reflected in RESPA regulations. On December 20, 2011, the CFPB published an interim final rule in the Federal Register to republish, effective December 30, 2011, HUD’s Regulation X, which implements RESPA. These republished regulations are substantively the same as the current RESPA regulations, but the CFPB makes certain non-substantive, technical, formatting, and stylistic changes to the regulations. The CFPB will accept public comments on the interim final rule until February 21, 2012.

With regard to the changes made, the CFPB specifies in 12 C.F.R. § 1024.6(d) the permissible changes that a lender may make to the Special Information Booklet, which is language that does not currently appear in the RESPA regulations. These changes all relate to the removal of references to HUD and contact information for the former RESPA Office at HUD. The CFPB also removes regulatory language that was never made effective after 1996 amendments to Regulation X, updates all references to HUD and internal cross-references to the republished regulations, and revises the regulations to reflect the scope of the CFPB’s authority related to RESPA (much of which is contained in RESPA’s statutory provisions).

In addition, the CFPB updates the Good Faith Estimate (GFE) and HUD-1 Settlement Statement forms to reflect the CFPB’s Office of Management and Budget (OMB) control number, 2502-0265. Such a change could have caused major headaches for mortgage lenders and settlement agents, whose document systems are programmed to reflect the HUD OMB number on the GFE and HUD-1 forms. The CFPB, however, anticipated this headache and states in the interim final rule that modifying existing forms merely to replace the OMB number “would impose a substantial burden on covered persons with limited or no net benefit to consumers.” Thus, according to language added to Appendix C and Section 1024.9(c) of the republished RESPA regulations, mortgage lenders and settlement agents may choose to replace HUD’s OMB number on the GFE and HUD-1 forms with the CFPB’s OMB number. Such a modification, however, will not be required until a future final rule is promulgated and takes effect. That final rule will likely be the regulations that substantially overhaul and combine the GFE and initial Truth in Lending disclosure forms, as well as the HUD-1 and final Truth in Lending disclosure forms, which the CFPB has yet to propose.

For now, it is still business as usual as it relates to the GFE, HUD-1, and other requirements under RESPA. Stay tuned, though; we expect the CFPB to eventually propose several changes to RESPA regulations.

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