[Federal Register Volume 61, Number 171 (Tuesday, September 3, 1996)]
[Rules and Regulations]
[Page 46510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22370]



[[Page 46509]]


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Part II





Department of Housing and Urban Development





_______________________________________________________________________



24 CFR Part 3500



Real Estate Settlement Procedures Act: Streamlining Regulatory Reform 
and Escrow Accounting Procedures; Final Rule and Proposed Rule

  Federal Register / Vol. 61, No. 171 / Tuesday, September 3, 1996 / 
Rules and Regulations  

[[Page 46510]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 3500

[Docket No. FR-4023-F-03]
RIN 2502-AG69


Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner; Real Estate Settlement Procedures Act; Streamlining Final 
Rule; Correction and Clarification

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Correction to final rule and clarification.

-----------------------------------------------------------------------

SUMMARY: On March 26, 1996 (61 FR 13232), the Department published a 
final rule streamlining its regulations under the Real Estate 
Settlement Procedures Act (RESPA). That rule, when published, left 
unchanged references in the rule to ``effective date[s]'' in certain 
provisions. HUD's intent was that these references should continue to 
refer to the effective date of the escrow accounting procedures rule, 
which was May 24, 1995, not to the effective date of the streamlining 
rule. By this document, the text of the streamlining rule is corrected 
to include expressly the May 24, 1995, effective date in the applicable 
provisions.
    In addition, this document contains a technical clarification of 
the streamlining rule concerning the use of toll-free numbers.

EFFECTIVE DATE: October 8, 1996.

FOR FURTHER INFORMATION CONTACT: David R. Williamson, Director, Office 
of Consumer and Regulatory Affairs, Room 5241, Department of Housing 
and Urban Development, 451 Seventh Street, SW, Washington, DC 20410, 
telephone number (202) 708-4560 (this is not a toll-free number); or 
for legal questions: Kenneth A. Markison, Assistant General Counsel for 
GSE/RESPA, Grant Mitchell, Senior Attorney for RESPA, or Richard S. 
Bennett, Attorney, Room 9262, Department of Housing and Urban 
Development, 451 Seventh Street, SW, Washington, DC 20410, telephone 
number (202) 708-1550 (this is not a toll-free number). For hearing- or 
speech-impaired persons, this number may be accessed via TTY (text 
telephone) by calling the Federal Information Relay Service at 1-800-
877-8339.

SUPPLEMENTARY INFORMATION:

Corrections

    The March 26, 1996 (61 FR 13232) streamlining rule left unchanged 
references in Secs. 3500.17(b) and (c)(4)(i) to the ``effective date of 
this rule'', the ``effective date of this final rule'', and ``effective 
date of this section''. These references appeared in the definitions of 
``phase-in period'', ``post rule account'', and ``pre-rule account''. 
HUD is issuing this correction to substitute the May 24, 1995, 
effective date of the applicable rule escrow accounting procedures rule 
(60 FR 8812, February 15, 1995), for the unclear references in those 
provisions.

Technical Clarification

    The streamlining rule was first corrected on April 29, 1996 (61 FR 
18674). Subsequently, some servicers have noted that the streamlining 
rule removed from the Code of Federal Regulations (CFR) a number of 
examples of Initial and Annual Escrow Account Statements. Each example 
of the statements referenced ``[Servicer's name, address and toll-free 
number]'' under the format's title. Some have questioned whether the 
removal of these formats from the CFR constitutes a change in the 
requirements pertaining to toll-free numbers.
    The requirements have not changed. As the preamble to the 
streamlining rule makes clear, while the Department removed from 
codification several of the appendices that previously accompanied part 
3500, these materials have been preserved and are available as Public 
Guidance Documents. Because the removal of these formats from 
codification did not change any requirements, including those for toll-
free numbers (see, e.g., paragraph 6(b)(3)(B) of RESPA; 12 U.S.C. 
2605(b)(3)(B)), HUD does not believe that any change to the rule text 
is required to make this clarification.

List of Subjects in 24 CFR Part 3500

    Consumer protection, Condominiums, Housing, Mortgages, Mortgage 
servicing, Reporting and recordkeeping requirements.

    Accordingly, part 3500 of title 24 of the Code of Federal 
Regulations is corrected by making the following correcting amendments:

PART 3500--REAL ESTATE SETTLEMENT PROCEDURES ACT

    1. The authority citation is revised to read as follows:

    Authority: 12 U.S.C. 2601 et seq.; 42 U.S.C. 3535(d).

    2. Section 3500.17 is amended:
    a. In paragraph (b) by revising the definitions of ``Phase-in 
period'', ``Post-rule account'', and ``Pre-rule account''; and
    b. In paragraph (c)(4)(i) by revising the last sentence, to read as 
follows:


Sec. 3500.17  Escrow Accounts.

* * * * *
    (b) * * *
    Phase-in period means the period beginning on May 24, 1995, and 
ending on the conversion date, i.e., October 27, 1997, by which date 
all servicers shall use the aggregate accounting method in conducting 
escrow account analyses.
    Post-rule account means an escrow account established in connection 
with a federally related mortgage loan whose settlement date is on or 
after May 24, 1995.
* * * * *
    Pre-rule account is an escrow account established in connection 
with a federally related mortgage loan whose settlement date is before 
May 24, 1995.
* * * * *
    (c) * * *
    (4) * * *
    (i) * * * After May 24, 1995, refinancing transactions (as defined 
in Sec. 3500.2) shall comply with the requirements for post-rule 
accounts.
* * * * *
    Dated: August 27, 1996.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 96-22370 Filed 8-30-96; 8:45 am]
BILLING CODE 4210-27-P