[Code of Federal Regulations]

[Title 24, Volume 5]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR3500.6]



[Page 272-273]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

 CHAPTER XX--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING 

        COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 3500_REAL ESTATE SETTLEMENT PROCEDURES ACT--Table of Contents

 

Sec.  3500.6  Special information booklet at time of loan application.



    (a) Lender to provide special information booklet. Subject to the 

exceptions set forth in this paragraph, the lender shall provide a copy 

of the special information booklet to a person from whom the lender 

receives, or for whom the lender prepares, a written application for a 

federally related mortgage loan. When two or more persons apply together 

for a loan, the lender is in compliance if the lender provides a copy of 

the booklet to one of the persons applying.

    (1) The lender shall provide the special information booklet by 

delivering it or placing it in the mail to the applicant not later than 

three business days (as that term is defined in Sec.  3500.2) after the 

application is received or prepared. However, if the lender denies the 

borrower's application for credit before the end of the three-business-

day period, then the lender need not provide the booklet to the 

borrower. If a borrower uses a mortgage broker, the mortgage broker 

shall distribute the special information booklet and the lender need not 

do so. The intent of this provision is that the applicant receive the 

special information booklet at the earliest possible date.

    (2) In the case of a federally related mortgage loan involving an 

open-ended credit plan, as defined in Sec.  226.2(a)(20) of Regulation Z 

(12 CFR), a lender or mortgage broker that provides the borrower with a 

copy of the brochure entitled ``When Your Home is On the Line: What You 

Should Know About Home Equity Lines of Credit'', or any successor 

brochure issued by the Board of Governors of the Federal Reserve System, 

is deemed to be in compliance with this section.

    (3) In the categories of transactions set forth at the end of this 

paragraph, the lender or mortgage broker does not have to provide the 

booklet to the borrower. Under the authority of section 19(a) of RESPA 

(12 U.S.C. 2617(a)), the Secretary may issue a revised or separate 

special information booklet that deals with these transactions, or the 

Secretary may chose to endorse the forms or booklets of other Federal 

agencies. In such an event, the requirements for delivery by lenders and 

the availability of the booklet or alternate materials for these 

transactions will be set forth in a Notice in the Federal Register. This 

paragraph shall apply to the following transactions:

    (i) Refinancing transactions;

    (ii) Closed-end loans, as defined in 12 CFR 226.2(a)(10) of 

Regulation Z, when the lender takes a subordinate lien;

    (iii) Reverse mortgages; and

    (iv) Any other federally related mortgage loan whose purpose is not 

the purchase of a 1- to 4-family residential property.

    (b) Revision. The Secretary may from time to time revise the special 

information booklet by publishing a notice in the Federal Register.

    (c) Reproduction. The special information booklet may be reproduced 

in any form, provided that no change is made other than as provided 

under paragraph (d) of this section. The special information booklet may 

not be made a part of a larger document for purposes of distribution 

under RESPA and this section. Any color, size and quality of paper, type 

of print, and method of reproduction may be used so long as the booklet 

is clearly legible.

    (d) Permissible changes. (1) No changes to, deletions from, or 

additions to the special information booklet currently prescribed by the 

Secretary shall be made other than those specified in this paragraph (d) 

or any others approved in writing by the Secretary. A request to the 

Secretary for approval of any changes shall be submitted in writing



[[Page 273]]



to the address indicated in Sec.  3500.3, stating the reasons why the 

applicant believes such changes, deletions or additions are necessary.

    (2) The cover of the booklet may be in any form and may contain any 

drawings, pictures or artwork, provided that the words ``settlement 

costs'' are used in the title. Names, addresses and telephone numbers of 

the lender or others and similar information may appear on the cover, 

but no discussion of the matters covered in the booklet shall appear on 

the cover.

    (3) The special information booklet may be translated into languages 

other than English.