Real Estate Settlement Procedures Act (RESPA): Rule To Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs; Deferred Applicability Date for the Revised Definition of “Required Use”


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. The November 17, 2008, final rule provides that the revised definition is applicable commencing January 16, 2009, the effective date of the final rule. As a result of recently initiated litigation, HUD has determined to delay the effective date of the revised definition of “Required use” until April 16, 2009.

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 (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 informationregarding 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 effective date of the November 17, 2008, final rule is January 16, 2009. However, the final rule provides for an appropriate transition period for certain requirements. Other provisions are to be implemented upon the effective date of the final rule.

Among those regulatory changes to be implemented upon the effective date of January 16, 2009, is the revised definition of the term “Required use.” This amendment has become the subject of recently initiated litigation. (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 is issuing this final rule to delay the effective date of the revised definition of “Required use” for an additional 90 days until April 16, 2009.

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 § 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 rule for effect without first soliciting public comment as public comment is impracticable, given the litigation schedule established by the court.

Accordingly, HUD's final rule published on November 17, 2008 at 73 FR 68204 (Docket No. FR 5180-F-03, FR Doc. E8-27070) is corrected as follows: 1. On page 68239, beginning in the first column, § 3500.1(b)(1) is corrected to read as follows: § 3500.1 * * * * *

(b) * * *

(1) The definition of Required use in§ 3500.2 is applicable commencing on April 16, 2009; §§ 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: January 9, 2009. Brian D. Montgomery,

Assistant Secretary for Housing-Federal Housing Commissioner.

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