[Federal Register Volume 74, Number 45 (Tuesday, March 10, 2009)]
[Rules and Regulations]
[Pages 10172-10174]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-5221]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 3500
[Docket No. FR-5180-F-05]
RIN 2502-AI61
Real Estate Settlement Procedures Act (RESPA): Rule To Simplify
and Improve the Process of Obtaining Mortgages and Reduce Consumer
Settlement Costs; Further Deferred Applicability Date for the Revised
Definition of ``Required Use'' and Solicitation of Public Comment on
Withdrawal of Required Use Provision
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Final rule; request for comments.
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SUMMARY: This final rule delays the effective date of the definition of
``required use'' as revised by HUD's November 17, 2008, final rule
amending its RESPA regulations, until July 16, 2009. The November 17,
2008, final rule revised HUD's RESPA regulations to further the
purposes of RESPA by requiring more timely and effective disclosures
related to mortgage settlement costs for federally related mortgage
loans to consumers. The final rule revised the existing definition of
``required use,'' which revision was directed to enhancing protections
for consumers from certain practices conducted by affiliated business
arrangements. The revised definition of ``required use'' would have
become effective on January 16, 2009. However, on January 15, 2009, HUD
published a final rule that delayed the effective date of the
definition of ``required use'' from January 16, 2009, to April 16,
2009, due to litigation by the National Association of Home Builders,
et al., around the time of issuance of the final rule. For this same
reason, HUD is further delaying the effective date of required use
until July 16, 2009.
In this rule, HUD also solicits comment on withdrawing the revised
definition of ``required use'' from the November 17, 2008, final rule.
HUD will consider these comments before pursuing new rulemaking process
on this definition. Since promulgating the rule on November 17, 2008,
HUD has determined to reevaluate the scope and operation of the
required use provision. New rulemaking would give HUD the opportunity
to present for public consideration a new proposal based upon HUD's
reevaluation of the required use provision to help ensure better
consumer protections.
[[Page 10173]]
DATES: The amendment to Sec. 3500.1 is effective March 10, 2009. The
effective date of the definition of ``required use'' in Sec. 3500.2,
as revised by HUD's final rule published on November 17, 2008, at 73 FR
68204, and further delayed by final rule published on January 15, 2009,
at 74 FR 2369, is further delayed to July 16, 2009.
Comment Due Date: April 9, 2009.
ADDRESSES: Interested persons are invited to submit comments regarding
this rule to the Regulations Division, Office of General Counsel, 451
7th Street, SW., Room 10276, Department of Housing and Urban
Development, Washington, DC 20410-0500. Communications must refer to
the above docket number and title. There are two methods for submitting
public comments. All submissions must refer to the above docket number
and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street, SW., Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly encourages commenters to submit
comments electronically. Electronic submission of comments allows the
commenter maximum time to prepare and submit a comment, ensures timely
receipt by HUD, and enables HUD to make them immediately available to
the public. Comments submitted electronically through the http://www.regulations.gov Web site can be viewed by other commenters and
interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
Note: To receive consideration as public comments, comments must
be submitted through one of the two methods specified above. Again,
all submissions must refer to the docket number and title of the
rule.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the public comments must be
scheduled by calling the Regulations Division at 202-708-3055 (this is
not a toll-free number). Individuals with speech or hearing impairments
may access this number through TTY by calling the Federal Information
Relay Service at 800-877-8339. Copies of all comments submitted are
available for inspection and downloading at www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Ivy Jackson, Director, or Barton
Shapiro, Deputy Director, Office of RESPA and Interstate Land Sales,
Office of Housing, Department of Housing and Urban Development, 451 7th
Street, SW., Room 9158, Washington, DC 20410-8000; telephone 202-708-
0502 (this is not a toll-free telephone number). Persons with hearing
or speech impairments may access this number through TTY by calling the
toll-free Federal Information Relay Service at 800-877-8339.
SUPPLEMENTARY INFORMATION: On November 17, 2008 (73 FR 68204), HUD
published a final rule amending its regulations to further the purposes
of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601-
2617) by requiring more timely and effective disclosures related to
mortgage settlement costs for federally related mortgage loans to
consumers. The final rule followed publication of a March 14, 2008,
proposed rule (73 FR 14030) and made changes in response to public
comment and in further consideration of certain issues by HUD.
Additional information regarding the regulatory amendments, and the
changes made by HUD at the final rule stage, is provided in the
preamble to the November 17, 2008, final rule.
The November 17, 2008, final rule became effective on January 16,
2009, but provided a longer transition period for the majority of the
new requirements. Other provisions, however, were scheduled to take
effect on January 16, 2009. Among regulatory changes identified as
being applicable upon the effective date of January 16, 2009, is the
revised definition of the term ``required use.'' The revision of that
definition became the subject of litigation, following issuance of the
final rule. (National Association of Home Builders, et al. v. Steve
Preston, et al., Civ. Action No. 08-CV-1324, United States District
Court for the Eastern District of Virginia, Alexandria Division.)
For reasons related to the proper litigation of this case, HUD
issued a final rule on January 15, 2009 (74 FR 2369) that deferred the
effective date of the revised definition of ``required use'' for an
additional 90 days until April 16, 2009. The litigation continues and
HUD finds again that for reasons including the pending litigation, the
applicability date of the definition of ``required use'' should be
further delayed until July 16, 2009. The effective and implementation
dates of the remaining provisions of the November 17, 2008, final rule
are not affected by the action taken in this rule.
The further delay is consistent with the direction to federal
agencies, provided in a January 21, 2009, memorandum from the Director
of the Office of Management and Budget to consider extending the
effective date for rules published under the prior Administration,
which have not yet taken effect. Additionally, the memorandum notes
that the Administrative Procedure Act provides for agencies to postpone
the effective date of an agency action pending judicial review (see 5
U.S.C. 705). Accordingly, this further extension is consistent with law
and the new Administration's procedural directions.
With the further delay of the effective date, HUD seeks to use this
time to solicit public comment on withdrawing the ``required use''
definition, as promulgated in the November 17, 2008, final rule and
commencing new rulemaking on this definition, which would similarly
strive to ensure consumers are protected from certain practices
conducted by affiliated business arrangements. Since issuance of the
final rule, HUD has determined to reevaluate the scope and operation of
the required use provision. This issue is one of importance in the
RESPA context, and HUD, regulated industries, consumers and the public
generally would be better served by new rulemaking. New rulemaking
would offer HUD with the opportunity to present a new proposal based
upon HUD's reevaluation of the required use provision. New rulemaking
would provide consumers, industry, and other interested members of the
public with the opportunity to comment on a definition of ``required
use,'' developed as part of HUD's evaluation process, and for HUD to
make informed decisions based on this new commentary. HUD therefore
specifically seeks public comment on withdrawing the required use
provision from the November 17, 2008, final rule and commencing new
rulemaking on this subject.
In general, HUD publishes a rule for public comment before issuing
a rule for effect, in accordance with its own regulations on rulemaking
at 24 CFR part 10. Part 10, however, does provide in Sec. 10.1 for
exceptions from that general rule where HUD finds good cause to omit
advance notice and public participation. The Department finds that good
cause exists to publish this final
[[Page 10174]]
rule for effect without first soliciting public comment as requiring
public comment before extending the effective date would be contrary to
the interest of justice and the public interest.
List of Subjects in 24 CFR Part 3500
Consumer protection, Condominiums, Housing, Mortgagees, Mortgage
servicing, Reporting and recordkeeping requirements.
0
Accordingly, 24 CFR part 3500 is corrected by making the following
amendments:
PART 3500--REAL ESTATE SETTLEMENT PROCEDURES ACT
0
1. The authority citation for part 3500 continues to read as follows:
Authority: 12 U.S.C. 2601 et seq: 42 U.S.C. 3535(d).
0
2. Section 3500.1(b)(1) is revised to read as follows:
Sec. 3500.1 Designation and applicability.
* * * * *
(b) * * *
(1) The definition of Required use in Sec. 3500.2 is applicable
commencing on July 16, 2009; Sec. Sec. 3500.8(b), 3500.17, 3500.21,
3500.22 and 3500.23, and Appendices E and MS-1 are applicable
commencing January 16, 2009.
* * * * *
Dated: March 6, 2009.
Brian D. Montgomery,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. E9-5221 Filed 3-9-09; 8:45 am]
BILLING CODE 4210-67-P