12 U.S.C. § 2601 — Congressional findings and purpose

Page 1442 TITLE 12—BANKS AND BANKING § 2601 shall be entitled to escheat or take custody of the sum payable on such money order, trav- eler’s check, or similar written instrument, to the extent of that State’s power under its own laws to escheat or take custody of such sum, subject to the right of the State of purchase to recover such sum from the State of principal place of business if and when the law of the State of purchase makes provision for escheat or custodial taking of such sum. (Pub. L. 93–495, title VI, § 603, Oct. 28, 1974, 88 Stat. 1525.) CHAPTER 27—REAL ESTATE SETTLEMENT PROCEDURES Sec. 2601. Congressional findings and purpose. 2602. Definitions. 2603. Uniform settlement statement. 2604. Home buying information booklets. 2605. Servicing of mortgage loans and administra- tion of escrow accounts. 2606. Exempted transactions. 2607. Prohibition against kickbacks and unearned fees. 2608. Title companies; liability of seller. 2609. Limitation on requirement of advance depos- its in escrow accounts. 2610. Prohibition of fees for preparation of truth- in-lending, uniform settlement, and escrow account statements. 2611 to 2613. Repealed. 2614. Jurisdiction of courts; limitations. 2615. Contracts and liens; validity. 2616. State laws unaffected; inconsistent Federal and State provisions. 2617. Authority of Bureau. § 2601. Congressional findings and purpose (a) The Congress finds that significant reforms in the real estate settlement process are needed to insure that consumers throughout the Nation are provided with greater and more timely infor- mation on the nature and costs of the settle- ment process and are protected from unneces- sarily high settlement charges caused by certain abusive practices that have developed in some areas of the country. The Congress also finds that it has been over two years since the Sec- retary of Housing and Urban Development and the Administrator of Veterans’ Affairs sub- mitted their joint report to the Congress on ‘‘Mortgage Settlement Costs’’ and that the time has come for the recommendations for Federal legislative action made in that report to be im- plemented. (b) It is the purpose of this chapter to effect certain changes in the settlement process for residential real estate that will result— (1) in more effective advance disclosure to home buyers and sellers of settlement costs; (2) in the elimination of kickbacks or refer- ral fees that tend to increase unnecessarily the costs of certain settlement services; (3) in a reduction in the amounts home buy- ers are required to place in escrow accounts established to insure the payment of real es- tate taxes and insurance; and (4) in significant reform and modernization of local recordkeeping of land title informa- tion. (Pub. L. 93–533, § 2, Dec. 22, 1974, 88 Stat. 1724.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (b), was in the original ‘‘this Act’’, meaning Pub. L. 93–533, Dec. 22, 1974, 88 Stat. 1724, known as the Real Estate Settlement Procedures Act of 1974, which is classified principally to this chapter (§ 2601 et seq.). For complete classifica- tion of this Act to the Code, see Short Title note below and Tables. Statutory Notes and Related Subsidiaries CHANGE OF NAME Reference to Administrator of Veterans’ Affairs deemed to refer to Secretary of Veterans Affairs pursu- ant to section 10 of Pub. L. 100–527, set out as a Depart- ment of Veterans Affairs Act note under section 301 of Title 38, Veterans’ Benefits. EFFECTIVE DATE Pub. L. 93–533, § 20, formerly § 19, Dec. 22, 1974, 88 Stat. 1731, renumbered § 20, Pub. L. 94–205, § 10, Jan. 2, 1976, 89 Stat. 1159, provided that: ‘‘The provisions of this Act, and the amendments made thereby [see Short Title note below], shall become effective one hundred and eighty days after the date of the enactment of this Act [Dec. 22, 1974].’’ SHORT TITLE OF 2021 AMENDMENT Pub. L. 116–342, § 1, Jan. 13, 2021, 134 Stat. 5134, pro- vided that: ‘‘This Act [amending section 2603 of this title and section 1604 of Title 15, Commerce and Trade, and enacting provisions set out as a note under section 2603 of this title] may be cited as the ‘Building Up Inde- pendent Lives and Dreams Act’ or the ‘BUILD Act’.’’ SHORT TITLE OF 1976 AMENDMENT Pub. L. 94–205, § 1, Jan. 2, 1976, 89 Stat. 1157, provided: ‘‘That this Act [enacting section 2617 of this title, amending sections 2602, 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, en- acting provisions set out as a note under section 2602 of this title and amending provisions set out as a note under this section] may be cited as the ‘Real Estate Settlement Procedures Act Amendments of 1975’.’’ SHORT TITLE Pub. L. 93–533, § 1, Dec. 22, 1974, 88 Stat. 1724, provided that: ‘‘This Act [enacting this chapter and sections 1730f and 1831b of this title and provisions set out as notes under this section and section 1730f of this title] may be cited as the ‘Real Estate Settlement Proce- dures Act of 1974’.’’ SIMPLIFICATION AND UNIFICATION OF DISCLOSURES RE- QUIRED UNDER RESPA AND TILA FOR MORTGAGE TRANSACTIONS Pub. L. 104–208, div. A, title II, § 2101, Sept. 30, 1996, 110 Stat. 3009–398, provided that: ‘‘(a) IN GENERAL.—With respect to credit transactions which are subject to the Real Estate Settlement Proce- dures 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 of Governors of the Federal Reserve System (hereafter in this section referred to as the ‘Board’) and the Sec- retary of Housing and Urban Development (hereafter in this section referred to as the ‘Secretary’) shall take such action as may be necessary before the end of the 6-month period beginning on the date of enactment of this Act [Sept. 30, 1996]— ‘‘(1) to simplify and improve the disclosures appli- cable to such transactions under such Acts, including the timing of the disclosures; and ‘‘(2) to provide a single format for such disclosures which will satisfy the requirements of each such Act with respect to such transactions. 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