§ 2604. Home buying information booklets

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1974

   Real Estate Settlement Procedures Act of 1974

   Pub. L. 93–533 § 5 · 88 Stat. 1724

   Enacted · 12 U.S.C. § 2604

   Pub. L. 93–533, § 5, Dec. 22, 1974, 88 Stat. 1725

   Source evidence

   Code source credit
   Pub. L. 93–533, § 5, Dec. 22, 1974, 88 Stat. 1725

   Enacted provision · exact public law section
   Sec. 5. special information booklets (a) The Secretary shall prepare and distribute booklets to 12 USC 2604. help persons borrowing money to finance the purchase of residential real estate better to understand the nature and costs of real estate settlement services. The Secretary shall distribute such booklets to all lenders which make federally related mortgage loans. (b) Each booklet shall be in such form and detail as the Secretary shall prescribe and, in addition to such other information as the Secretary may provide, shall include in clear and concise language— (1) a description and explanation of the nature and purpose of each cost incident to a real estate settlement; (2) an explanation and sample of the standard real estate settlement form developed and prescribed under section 4; (3) a description and explanation of the nature and purpose of escrow accounts when used in connection with loans secured by residential real estate; (4) an explanation of the choices available to buyers of residential real estate in selecting persons to provide necessary services incident to a real estate settlement; and (5) an explanation of the unfair practices and unreasonable or unnecessary charges to be avoided by the prospective buyer with respect to a real estate settlement. Such booklets shall take into consideration differences in real estate settlement procedures which may exist among the several States and territories of the United States and among separate political subdivisions within the same State and territory. (c) Each lender referred to in subsection (a) shall provide the booklet described in such subsection to each person from whom it receives an application to borrow money to finance the purchase of residential real estate. Such booklet shall be provided at the time of receipt of such application. (d) Booklets may be printed and distributed by lenders if their form and content are approved by the Secretary as meeting the requirements of subsection (b) of this section.

2. 1976

   Real Estate Settlement Procedures Act Amendments of 1975

   Pub. L. 94–205 § 4 · 89 Stat. 1157

   1. Added · 12 U.S.C. § 2604(c)(e)

      Pub. L. 94–205 added subsec. (c)

   2. Redesignated · 12 U.S.C. § 2604(c)(e)

      Pub. L. 94–205 redesignated former subsec. (c) as (d)

   3. Substituted · 12 U.S.C. § 2604(c)(e)

      Pub. L. 94–205 substituted “or for whom it prepares a written application” for “an application”

   4. Inserted · 12 U.S.C. § 2604(c)(e)

      Pub. L. 94–205 inserted “or preparation” after “receipt”

   5. Redesignated · 12 U.S.C. § 2604(c)(e)

      Pub. L. 94–205 redesignated former subsec. (d) as (e)

   Source evidence

   Code amendment note
   Subsecs. (c) to (e). Pub. L. 94–205 added subsec. (c), redesignated former subsec. (c) as (d), substituted “or for whom it prepares a written application” for “an application” and inserted “or preparation” after “receipt”, and redesignated former subsec. (d) as (e).

   Enacted provision · exact public law section
   Sec. 4. Section 5 of the Real Estate Settlement Procedures Act of 12 USC 2604. 1974 is amended— (1) by redesignating subsections (c) and (d) as subsections (d) and (e), respectively; (2) by inserting after subsection (b) the following new subsection: “(c) Each lender shall include with the booklet a good faith estimate of the amount or range of charges for specific settlement services the borrower is likely to incur in connection with the settlement as prescribed by the Secretary.”; (3) by striking out “an application” in the first sentence of subsection (d), as redesignated by paragraph (1) of this section, and inserting in lieu thereof “or for whom it prepares a written application”; and (4) by inserting “or preparation” immediately after “receipt” in the second sentence of subsection (d), as redesignated by paragraph (1) of this section.

3. 1992

   Housing and Community Development Act of 1992

   Pub. L. 102–550 title IX § 951 · 106 Stat. 3672

   Substituted · 12 U.S.C. § 2604(d)

   Pub. L. 102–550 substituted “Such booklet shall be provided by delivering it or placing it in the mail not later than 3 business days after the lender receives the application, but no booklet need be provided if the lender denies the application for credit before the end of the 3-day period.” for “Such booklet shall be provided at the time of receipt or preparation of such application.”

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 102–550 substituted “Such booklet shall be provided by delivering it or placing it in the mail not later than 3 business days after the lender receives the application, but no booklet need be provided if the lender denies the application for credit before the end of the 3-day period.” for “Such booklet shall be provided at the time of receipt or preparation of such application.”

4. 2010

   Expand and Preserve Home Ownership Through Counseling Act

   Pub. L. 111–203 § 1450(1) · 124 Stat. 1376

   Substituted · 12 U.S.C. § 2604

   Pub. L. 111–203, § 1450(1), substituted “Home buying” for “Special” in section catchline

   Source evidence

   Code amendment note
   Pub. L. 111–203, § 1450(1), substituted “Home buying” for “Special” in section catchline.

   Enacted provision · exact public law section
   (1) in the section heading, by striking “special” and inserting “home buying”;

   Effective date note
   Amendment by section 1098(3) of Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. Amendment by section 1450 of Pub. L. 111–203 effective on the date on which final regulations implementing that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade.

5. 2010

   Consumer Financial Protection Act of 2010

   Pub. L. 111–203 § 1098(3)(A) · 124 Stat. 1376

   Substituted · 12 U.S.C. § 2604

   Pub. L. 111–203, § 1098(3)(A), substituted “Bureau” for “Secretary” wherever appearing

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 111–203, § 1098(3)(A), substituted “Bureau” for “Secretary” wherever appearing.

   Enacted provision · exact public law section
   (A) by striking “Secretary” each place that term appears and inserting “Bureau”; and

   Effective date note
   Amendment by section 1098(3) of Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. Amendment by section 1450 of Pub. L. 111–203 effective on the date on which final regulations implementing that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade.

6. 2010

   Expand and Preserve Home Ownership Through Counseling Act

   Pub. L. 111–203 § 1450(2) · 124 Stat. 1376

   1. Added · 12 U.S.C. § 2604(a)

      Pub. L. 111–203, § 1450(2), added subsec. (a)

   2. Struck · 12 U.S.C. § 2604(a)

      Pub. L. 111–203, § 1450(2), struck out former subsec. (a). Prior to amendment, text read as follows: “The Bureau shall prepare and distribute booklets jointly addressing compliance with the requirements of the Truth in Lending Act and the provisions of this chapter, in order to help persons borrowing money to finance the purchase of residential real estate better to understand the nature and costs of real estate settlement services. The Bureau shall distribute such booklets to all lenders which make federally related mortgage loans.”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 111–203, § 1450(2), added subsec. (a) and struck out former subsec. (a). Prior to amendment, text read as follows: “The Bureau shall prepare and distribute booklets jointly addressing compliance with the requirements of the Truth in Lending Act and the provisions of this chapter, in order to help persons borrowing money to finance the purchase of residential real estate better to understand the nature and costs of real estate settlement services. The Bureau shall distribute such booklets to all lenders which make federally related mortgage loans.”

   Enacted provision · exact public law section
   (2) by striking subsections (a) and (b) and inserting the following new subsections: “(a) Preparation and Distribution.— The Director of the Bureau of Consumer Financial Protection (hereafter in this section referred to as the ‘Director’) shall prepare, at least once every 5 years, a booklet to help consumers applying for federally related mortgage loans to understand the nature and costs of real estate settlement services. The Director shall prepare the booklet in various languages and cultural styles, as the Director determines to be appropriate, so that the booklet is understandable and accessible to homebuyers of different ethnic and cultural backgrounds. The Director shall distribute such booklets to all lenders that make federally related mortgage loans. The Lists. Director shall also distribute to such lenders lists, organized by location, of homeownership counselors certified under section 106(e) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) for use in complying with the requirement under subsection (c) of this section. “(b) Contents.— Each booklet shall be in such form and detail as the Director shall prescribe and, in addition to such other information as the Director may provide, shall include in plain and understandable language the following information: “(1) A description and explanation of the nature and purpose of the costs incident to a real estate settlement or a federally related mortgage loan. The description and explanation shall provide general information about the mortgage process as well as specific information concerning, at a minimum— “(A) balloon payments; “(B) prepayment penalties; “(C) the advantages of prepayment; and “(D) the trade-off between closing costs and the interest rate over the life of the loan. “(2) An explanation and sample of the uniform settlement statement required by section 4. “(3) List. A list and explanation of lending practices, including those prohibited by the Truth in Lending Act or other applicable Federal law, and of other unfair practices and unreasonable or unnecessary charges to be avoided by the prospective buyer with respect to a real estate settlement. “(4) A List. list and explanation of questions a consumer obtaining a federally related mortgage loan should ask regarding the loan, including whether the consumer will have the ability to repay the loan, whether the consumer sufficiently shopped for the loan, whether the loan terms include prepayment penalties or balloon payments, and whether the loan will benefit the borrower. “(5) An explanation of the right of rescission as to certain transactions provided by sections 125 and 129 of the Truth in Lending Act. “(6) A brief explanation of the nature of a variable rate mortgage and a reference to the booklet entitled ‘Consumer Handbook on Adjustable Rate Mortgages’, published by the Director, or to any suitable substitute of such booklet that the Director may subsequently adopt pursuant to such section. “(7) A brief explanation of the nature of a home equity line of credit and a reference to the pamphlet required to be provided under section 127A of the Truth in Lending Act. “(8) Information about homeownership counseling services made available pursuant to section 106(a)(4) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a recommendation that the consumer use such services, and notification that a list of certified providers of homeownership counseling in the area, and their contact information, is available. “(9) An explanation of the nature and purpose of escrow accounts when used in connection with loans secured by residential real estate and the requirements under section 10 of this Act regarding such accounts. “(10) An explanation of the choices available to buyers of residential real estate in selecting persons to provide necessary services incidental to a real estate settlement. “(11) An explanation of a consumer’s responsibilities, liabilities, and obligations in a mortgage transaction. “(12) An explanation of the nature and purpose of real estate appraisals, including the difference between an appraisal and a home inspection. “(13) Notice that the Office of Housing of the Department of Housing and Urban Development has made publicly available a brochure regarding loan fraud and a World Wide Web address and toll-free telephone number for obtaining the brochure. The booklet prepared pursuant to this section shall take into consideration differences in real estate settlement procedures that may exist among the several States and territories of the United States and among separate political subdivisions within the same State and territory.” ;

   Effective date note
   Amendment by section 1098(3) of Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. Amendment by section 1450 of Pub. L. 111–203 effective on the date on which final regulations implementing that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade.

7. 2010

   Consumer Financial Protection Act of 2010

   Pub. L. 111–203 § 1098(3)(B) · 124 Stat. 1376

   Substituted · 12 U.S.C. § 2604(a)

   Pub. L. 111–203, § 1098(3)(B), substituted “The Bureau shall prepare and distribute booklets jointly addressing compliance with the requirements of the Truth in Lending Act and the provisions of this chapter, in order to help persons borrowing money to finance the purchase of residential real estate better to understand the nature and costs of real estate settlement services.” for “The Secretary shall prepare and distribute booklets to help persons borrowing money to finance the purchase of residential real estate better to understand the nature and costs of real estate settlement services.”

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 111–203, § 1098(3)(B), substituted “The Bureau shall prepare and distribute booklets jointly addressing compliance with the requirements of the Truth in Lending Act and the provisions of this chapter, in order to help persons borrowing money to finance the purchase of residential real estate better to understand the nature and costs of real estate settlement services.” for “The Secretary shall prepare and distribute booklets to help persons borrowing money to finance the purchase of residential real estate better to understand the nature and costs of real estate settlement services.”

   Enacted provision · exact public law section
   (B) in subsection (a), by striking the first sentence and inserting the following: “The Booklets. Bureau shall prepare and distribute booklets jointly addressing compliance with the requirements of the Truth in Lending Act and the provisions of this title, in order to help persons borrowing money to finance the purchase of residential real estate better to understand the nature and costs of real estate settlement services.”;

   Effective date note
   Amendment by section 1098(3) of Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. Amendment by section 1450 of Pub. L. 111–203 effective on the date on which final regulations implementing that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade.

8. 2010

   Expand and Preserve Home Ownership Through Counseling Act

   Pub. L. 111–203 § 1450(2) · 124 Stat. 1376

   1. Added · 12 U.S.C. § 2604(b)

      Pub. L. 111–203, § 1450(2), added subsec. (b)

   2. Struck · 12 U.S.C. § 2604(b)

      Pub. L. 111–203, § 1450(2), struck out former subsec. (b) which related to form and detail, cost elements, standard settlement form, escrow accounts, selection of persons for settlement services; and consideration of differences in settlement procedures

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 111–203, § 1450(2), added subsec. (b) and struck out former subsec. (b) which related to form and detail, cost elements, standard settlement form, escrow accounts, selection of persons for settlement services; and consideration of differences in settlement procedures.

   Enacted provision · exact public law section
   (2) by striking subsections (a) and (b) and inserting the following new subsections: “(a) Preparation and Distribution.— The Director of the Bureau of Consumer Financial Protection (hereafter in this section referred to as the ‘Director’) shall prepare, at least once every 5 years, a booklet to help consumers applying for federally related mortgage loans to understand the nature and costs of real estate settlement services. The Director shall prepare the booklet in various languages and cultural styles, as the Director determines to be appropriate, so that the booklet is understandable and accessible to homebuyers of different ethnic and cultural backgrounds. The Director shall distribute such booklets to all lenders that make federally related mortgage loans. The Lists. Director shall also distribute to such lenders lists, organized by location, of homeownership counselors certified under section 106(e) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) for use in complying with the requirement under subsection (c) of this section. “(b) Contents.— Each booklet shall be in such form and detail as the Director shall prescribe and, in addition to such other information as the Director may provide, shall include in plain and understandable language the following information: “(1) A description and explanation of the nature and purpose of the costs incident to a real estate settlement or a federally related mortgage loan. The description and explanation shall provide general information about the mortgage process as well as specific information concerning, at a minimum— “(A) balloon payments; “(B) prepayment penalties; “(C) the advantages of prepayment; and “(D) the trade-off between closing costs and the interest rate over the life of the loan. “(2) An explanation and sample of the uniform settlement statement required by section 4. “(3) List. A list and explanation of lending practices, including those prohibited by the Truth in Lending Act or other applicable Federal law, and of other unfair practices and unreasonable or unnecessary charges to be avoided by the prospective buyer with respect to a real estate settlement. “(4) A List. list and explanation of questions a consumer obtaining a federally related mortgage loan should ask regarding the loan, including whether the consumer will have the ability to repay the loan, whether the consumer sufficiently shopped for the loan, whether the loan terms include prepayment penalties or balloon payments, and whether the loan will benefit the borrower. “(5) An explanation of the right of rescission as to certain transactions provided by sections 125 and 129 of the Truth in Lending Act. “(6) A brief explanation of the nature of a variable rate mortgage and a reference to the booklet entitled ‘Consumer Handbook on Adjustable Rate Mortgages’, published by the Director, or to any suitable substitute of such booklet that the Director may subsequently adopt pursuant to such section. “(7) A brief explanation of the nature of a home equity line of credit and a reference to the pamphlet required to be provided under section 127A of the Truth in Lending Act. “(8) Information about homeownership counseling services made available pursuant to section 106(a)(4) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a recommendation that the consumer use such services, and notification that a list of certified providers of homeownership counseling in the area, and their contact information, is available. “(9) An explanation of the nature and purpose of escrow accounts when used in connection with loans secured by residential real estate and the requirements under section 10 of this Act regarding such accounts. “(10) An explanation of the choices available to buyers of residential real estate in selecting persons to provide necessary services incidental to a real estate settlement. “(11) An explanation of a consumer’s responsibilities, liabilities, and obligations in a mortgage transaction. “(12) An explanation of the nature and purpose of real estate appraisals, including the difference between an appraisal and a home inspection. “(13) Notice that the Office of Housing of the Department of Housing and Urban Development has made publicly available a brochure regarding loan fraud and a World Wide Web address and toll-free telephone number for obtaining the brochure. The booklet prepared pursuant to this section shall take into consideration differences in real estate settlement procedures that may exist among the several States and territories of the United States and among separate political subdivisions within the same State and territory.” ;

   Effective date note
   Amendment by section 1098(3) of Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. Amendment by section 1450 of Pub. L. 111–203 effective on the date on which final regulations implementing that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade.

9. 2010

   Expand and Preserve Home Ownership Through Counseling Act

   Pub. L. 111–203 § 1450(3) · 124 Stat. 1376

   Inserted · 12 U.S.C. § 2604(c)

   Pub. L. 111–203, § 1450(3), inserted at end “Each lender shall also include with the booklet a reasonably complete or updated list of homeownership counselors who are certified pursuant to section 1701x(e) of this title and located in the area of the lender.”

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 111–203, § 1450(3), inserted at end “Each lender shall also include with the booklet a reasonably complete or updated list of homeownership counselors who are certified pursuant to section 1701x(e) of this title and located in the area of the lender.”

   Enacted provision · exact public law section
   (3) in subsection (c), by inserting at the end the following new sentence: “Each lender shall also include with the booklet a reasonably complete or updated list of homeownership counselors who are certified pursuant to section 106(e) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) and located in the area of the lender.”; and

   Effective date note
   Amendment by section 1098(3) of Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. Amendment by section 1450 of Pub. L. 111–203 effective on the date on which final regulations implementing that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade.

10. 2010

    Expand and Preserve Home Ownership Through Counseling Act

    Pub. L. 111–203 § 1450(4) · 124 Stat. 1376

    Inserted · 12 U.S.C. § 2604(d)

    Pub. L. 111–203, § 1450(4), inserted “The lender shall provide the booklet in the version that is most appropriate for the person receiving it.” after the first sentence

    Source evidence

    Code amendment note
    Subsec. (d). Pub. L. 111–203, § 1450(4), inserted “The lender shall provide the booklet in the version that is most appropriate for the person receiving it.” after the first sentence.

    Enacted provision · exact public law section
    (4) in subsection (d), by inserting after the period at the end of the first sentence the following: “The lender shall provide the booklet in the version that is most appropriate for the person receiving it.”.

    Effective date note
    Amendment by section 1098(3) of Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. Amendment by section 1450 of Pub. L. 111–203 effective on the date on which final regulations implementing that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade.

11. 2012

    Biggert-Waters Flood Insurance Reform Act of 2012

    Pub. L. 112–141 div. F title II § 100222 · 126 Stat. 405

    Added · 12 U.S.C. § 2604(b)(14)

    Pub. L. 112–141 added par. (14) at end of subsec. (b)

    Source evidence

    Code amendment note
    Subsec. (b)(14). Pub. L. 112–141 added par. (14) at end of subsec. (b).

    Enacted provision · exact public law section
    SEC. 100222. NOTICE OF FLOOD INSURANCE AVAILABILITY UNDER RESPA.   Section 5(b) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604(b)), as amended by section 1450 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111–203; 124 Stat. 2174), is amended by adding at the end the following: “(14) An explanation of flood insurance and the availability of flood insurance under the National Flood Insurance Program or from a private insurance company, whether or not the real estate is located in an area having special flood hazards.” .

12. 2014

    Homeowner Flood Insurance Affordability Act of 2014

    Pub. L. 113–89 § 13(b) · 128 Stat. 1020

    Inserted · 12 U.S.C. § 2604(b)(14)

    Pub. L. 113–89 inserted before period at end “, and the following statement: ‘Although you may not be required to maintain flood insurance on all structures, you may still wish to do so, and your mortgage lender may still require you to do so to protect the collateral securing the mortgage. If you choose to not maintain flood insurance on a structure, and it floods, you are responsible for all flood losses relating to that structure.’ ” and transferred par. (14) to appear after par. (13)

    Source evidence

    Code amendment note
    Subsec. (b)(14). Pub. L. 113–89 inserted before period at end “, and the following statement: ‘Although you may not be required to maintain flood insurance on all structures, you may still wish to do so, and your mortgage lender may still require you to do so to protect the collateral securing the mortgage. If you choose to not maintain flood insurance on a structure, and it floods, you are responsible for all flood losses relating to that structure.’ ” and transferred par. (14) to appear after par. (13).

    Enacted provision · exact public law section
    (b) RESPA Statement.— Section 5(b) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604(b)) is amended— (1) in paragraph (14), by inserting before the period at the end the following: “, and the following statement: ‘Although you may not be required to maintain flood insurance on all structures, you may still wish to do so, and your mortgage lender may still require you to do so to protect the collateral securing the mortgage. If you choose to not maintain flood insurance on a structure, and it floods, you are responsible for all flood losses relating to that structure.’ ”; and (2) by transferring and inserting paragraph (14), as so amended, after paragraph (13).

17 of 18 references resolved to an enrolled provision · 1 partial