[Federal Register Volume 59, Number 140 (Friday, July 22, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17886]


[[Page Unknown]]

[Federal Register: July 22, 1994]


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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