[Congressional Record Volume 158, Number 118 (Friday, August 3, 2012)]
[Extensions of Remarks]
[Page E1423]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             RESPA HOME WARRANTY CLARIFICATION ACT OF 2011

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                               speech of

                             HON. JOE BACA

                             of california

                    in the house of representatives

                       Wesnesday, August 1, 2012

  Mr. BACA. Mr. Speaker, I rise in support of H.R. 2446, the RESPA Home 
Warranty Clarification Act.
  This bill clarifies that the sale of home warranties cannot be 
considered a settlement service, and therefore cannot be governed under 
the Real Estate Settlement Procedures Act, or RESPA.
  Many individuals buying a home want to avoid the financial risk of 
having to pay for major repairs on major systems and appliances.
  To reduce that risk and to get the peace of mind that comes with 
knowing they can help guard against the cost of significant repairs, 
home buyers often purchase a home warranty.
  Many individuals selling a home find that providing a home warranty 
at their own cost can help facilitate a quicker sale at a higher price 
by reducing the risk of the unknown for potential buyers.
  It is important to note that the purchase of the product is 
completely optional, and is not made mandatory by any financial 
institution or government sponsored enterprise during the home-buying 
process.
  Recently, however, HUD erroneously issued an interpretive rule 
blocking real estate agents from receiving a modest fee when they 
recommend the product to their client upon the purchase of their new 
home.
  As such, if this rule is allowed to stand, realtors would have no 
incentive to inform their clients about this product.
  Consequently, first-time homebuyers, or low- and moderate income-
families may not be made aware of this option, instead being forced to 
pay full price for the replacement of their home's most expensive 
appliances.
  At a time when our economy is still struggling, we need to ensure 
that hard working American families are still allowed to gain access to 
financial products that they depend on.
  That is why I urge my colleagues to support H.R. 2446.

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