12 U.S.C. § 2602 — Definitions

Page 1443 TITLE 12—BANKS AND BANKING § 2602 1 See References in Text note below. ‘‘(b) REGULATIONS.—To the extent that it is necessary to prescribe any regulation in order to effect any changes required to be made under subsection (a), the proposed regulation shall be published in the Federal Register before the end of the 6-month period referred to in subsection (a). ‘‘(c) RECOMMENDATIONS FOR LEGISLATION.—If the Board and the Secretary find that legislative action may be necessary or appropriate in order to simplify and unify the disclosure requirements under the Real Estate Settlement Procedures Act of 1974 [12 U.S.C. 2601 et seq.] and the Truth in Lending Act [15 U.S.C. 1601 et seq.], the Board and the Secretary shall submit a report containing recommendations to the Congress con- cerning such action.’’ § 2602. Definitions For purposes of this chapter— (1) the term ‘‘federally related mortgage loan’’ includes any loan (other than temporary financing such as a construction loan) which— (A) is secured by a first or subordinate lien on residential real property (including indi- vidual units of condominiums and coopera- tives) designed principally for the occupancy of from one to four families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan se- cured by the same property; and (B)(i) is made in whole or in part by any lender the deposits or accounts of which are insured by any agency of the Federal Gov- ernment, or is made in whole or in part by any lender which is regulated by any agency of the Federal Government, or (ii) is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by the Secretary or any other officer or agency of the Federal Government or under or in connection with a housing or urban de- velopment program administered by the Sec- retary or a housing or related program ad- ministered by any other such officer or agency; or (iii) is intended to be sold by the origi- nating lender to the Federal National Mort- gage Association, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, or a financial institution from which it is to be purchased by the Federal Home Loan Mortgage Cor- poration; or (iv) is made in whole or in part by any ‘‘creditor’’, as defined in section 1602(f) 1 of title 15, who makes or invests in residential real estate loans aggregating more than $1,000,000 per year, except that for the pur- pose of this chapter, the term ‘‘creditor’’ does not include any agency or instrumen- tality of any State; (2) the term ‘‘thing of value’’ includes any payment, advance, funds, loan, service, or other consideration; (3) the term ‘‘Settlement services’’ includes any service provided in connection with a real estate settlement including, but not limited to, the following: title searches, title examina- tions, the provision of title certificates, title insurance, services rendered by an attorney, the preparation of documents, property sur- veys, the rendering of credit reports or ap- praisals, pest and fungus inspections, services rendered by a real estate agent or broker, the origination of a federally related mortgage loan (including, but not limited to, the taking of loan applications, loan processing, and the underwriting and funding of loans), and the handling of the processing, and closing or set- tlement; (4) the term ‘‘title company’’ means any in- stitution which is qualified to issue title in- surance, directly or through its agents, and also refers to any duly authorized agent of a title company; (5) the term ‘‘person’’ includes individuals, corporations, associations, partnerships, and trusts; (6) the term ‘‘Secretary’’ means the Sec- retary of Housing and Urban Development; (7) the term ‘‘affiliated business arrange- ment’’ means an arrangement in which (A) a person who is in a position to refer business incident to or a part of a real estate settle- ment service involving a federally related mortgage loan, or an associate of such person, has either an affiliate relationship with or a direct or beneficial ownership interest of more than 1 percent in a provider of settlement services; and (B) either of such persons di- rectly or indirectly refers such business to that provider or affirmatively influences the selection of that provider; (8) the term ‘‘associate’’ means one who has one or more of the following relationships with a person in a position to refer settlement business: (A) a spouse, parent, or child of such person; (B) a corporation or business entity that controls, is controlled by, or is under common control with such person; (C) an em- ployer, officer, director, partner, franchisor, or franchisee of such person; or (D) anyone who has an agreement, arrangement, or under- standing, with such person, the purpose or substantial effect of which is to enable the person in a position to refer settlement busi- ness to benefit financially from the referrals of such business; and (9) the term ‘‘Bureau’’ means the Bureau of Consumer Financial Protection. (Pub. L. 93–533, § 3, Dec. 22, 1974, 88 Stat. 1724; Pub. L. 94–205, § 2, Jan. 2, 1976, 89 Stat. 1157; Pub. L. 98–181, title I [title IV, § 461(a)], Nov. 30, 1983, 97 Stat. 1230; Pub. L. 102–550, title IX, § 908(a), (b), Oct. 28, 1992, 106 Stat. 3873, 3874; Pub. L. 104–208, div. A, title II, § 2103(c)(1), Sept. 30, 1996, 110 Stat. 3009–400; Pub. L. 111–203, title X, § 1098(1), July 21, 2010, 124 Stat. 2103.) Editorial Notes REFERENCES IN TEXT Section 1602(f) of title 15, referred to in par. (1)(B)(iv), was redesignated section 1602(g) of title 15 by Pub. L. 111–203, title X, § 1100A(1)(A), July 21, 2010, 124 Stat. 2107. AMENDMENTS 2010—Par. (9). Pub. L. 111–203 added par. (9). 1996—Par. (7). Pub. L. 104–208 substituted ‘‘affiliated business arrangement’’ for ‘‘controlled business ar- rangement’’. 1992—Par. (1)(A). Pub. L. 102–550, § 908(b), inserted ‘‘or subordinate’’ after ‘‘first’’ and ‘‘, including any such Page 1444 TITLE 12—BANKS AND BANKING § 2603 1 See References in Text note below. secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same prop- erty’’ after ‘‘families’’. Par. (3). Pub. L. 102–550, § 908(a), inserted ‘‘the origina- tion of a federally related mortgage loan (including, but not limited to, the taking of loan applications, loan processing, and the underwriting and funding of loans),’’ after ‘‘broker,’’. 1983—Pars. (7), (8). Pub. L. 98–181 added pars. (7) and (8). 1976—Par. (1). Pub. L. 94–205, § 2(1), inserted ‘‘(other than temporary financing such as a construction loan)’’ in introductory text. Par. (1)(A). Pub. L. 94–205, § 2(2), inserted ‘‘a first lien on’’ after ‘‘is secured by’’. Par. (1)(B)(iii). Pub. L. 94–205, § 2(3)–(5), substituted ‘‘is intended to be sold by the originating lender to’’ for ‘‘is eligible for purchase by’’ and ‘‘a’’ and ‘‘is to’’ for ‘‘from any’’ and ‘‘could’’, respectively, and struck out ‘‘or’’ after ‘‘the Government National Mortgage Asso- ciation’’. Par. (1)(B)(iv). Pub. L. 94–205, § 2(6), inserted ‘‘, except that for the purpose of this chapter, the term ‘creditor’ does not include any agency or instrumentality of any State’’ after ‘‘more than $1,000,000 per year’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the des- ignated 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. EFFECTIVE DATE OF 1992 AMENDMENT Pub. L. 102–550, title IX, § 908(d), Oct. 28, 1992, 106 Stat. 3874, provided that: ‘‘This section [amending this sec- tion and enacting provisions set out below] shall take effect on the date of enactment of this Act [Oct. 28, 1992] and shall not apply retroactively.’’ EFFECTIVE DATE OF 1983 AMENDMENT Pub. L. 98–181, title I [title IV, § 461(f)], Nov. 30, 1983, 97 Stat. 1232, provided that: ‘‘The amendments made by this section [amending this section and sections 2607, 2614, and 2617 of this title] shall become effective on January 1, 1984.’’ EFFECTIVE DATE OF 1976 AMENDMENT Pub. L. 94–205, § 12, Jan. 2, 1976, 89 Stat. 1160, provided that: ‘‘The provisions of this Act and the amendments made hereby [enacting section 2617 of this title, amend- ing this section, sections 2603, 2604, 2607, 2609, and 2616 of this title, and section 1631 of Title 15, Commerce and Trade, repealing sections 2605 and 2606 of this title, and enacting and amending provisions set out as notes under section 2601 of this title] shall become effective upon enactment [Jan. 2, 1976]. The Secretary may sus- pend for up to one hundred and eighty days from the date of enactment of this Act [Jan. 2, 1976] any provi- sion of section 4 and section 5 of the Real Estate Settle- ment Procedures Act of 1974 [sections 2603 and 2604 of this title], as amended by this Act.’’ EFFECTIVE DATE Section effective 180 days after Dec. 22, 1974, see sec- tion 20 of Pub. L. 93–533, set out as a note under section 2601 of this title. REGULATIONS Pub. L. 102–550, title IX, § 908(c), Oct. 28, 1992, 106 Stat. 3874, provided that: ‘‘The Secretary of Housing and Urban Development shall issue regulations to imple- ment the amendments made by this section [amending this section] not later than the expiration of the 180- day period beginning on the date of the enactment of this Act [Oct. 28, 1992]. The regulations shall be issued after notice and opportunity for public comment pursu- ant to the provisions of section 553 of title 5, United States Code (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such section).’’ § 2603. Uniform settlement statement (a) Disclosure for mortgage loan transactions The Bureau shall publish a single, integrated disclosure for mortgage loan transactions (in- cluding real estate settlement cost statements) which includes the disclosure requirements of this section and section 2604 of this title, in con- junction with the disclosure requirements of the Truth in Lending Act [15 U.S.C. 1601 et seq.] that, taken together, may apply to a trans- action that is subject to both or either provi- sions of law. The purpose of such model disclo- sure shall be to facilitate compliance with the disclosure requirements of this chapter 1 and the Truth in Lending Act, and to aid the borrower or lessee in understanding the transaction by utilizing readily understandable language to simplify the technical nature of the disclosures. Such forms shall conspicuously and clearly itemize all charges imposed upon the borrower and all charges imposed upon the seller in con- nection with the settlement and shall indicate whether any title insurance premium included in such charges covers or insures the lender’s in- terest in the property, the borrower’s interest, or both. The Bureau may, by regulation, permit the deletion from the forms prescribed under this section of items which are not, under local laws or customs, applicable in any locality, ex- cept that such regulation shall require that the numerical code prescribed by the Bureau be re- tained in forms to be used in all localities. Noth- ing in this section may be construed to require that that part of the standard forms which re- lates to the borrower’s transaction be furnished to the seller, or to require that that part of the standard forms which relates to the seller be furnished to the borrower. (b) Availability for inspection; exceptions The forms prescribed under this section shall be completed and made available for inspection by the borrower at or before settlement by the person conducting the settlement, except that (1) the Bureau may exempt from the require- ments of this section settlements occurring in localities where the final settlement statement is not customarily provided at or before the date of settlement, or settlements where such re- quirements are impractical and (2) the borrower may, in accordance with regulations of the Bu- reau, waive his right to have the forms made available at such time. Upon the request of the borrower to inspect the forms prescribed under this section during the business day imme- diately preceding the day of settlement, the per- son who will conduct the settlement shall per- mit the borrower to inspect those items which are known to such person during such preceding day. (c) Disclosure of fees The standard form described in subsection (a) may include, in the case of an appraisal coordi- nated by an appraisal management company (as