We have received many questions from FDIC-supervised institutions about the proper completion of the HUD-1, HUD-1A and Good Faith Estimate (GFE) forms for home mortgage loans required by the Real Estate Settlement Procedures Act (RESPA) and the Department of Housing and Urban Development's (HUD) implementing Regulation X. The attached documents from HUD should assist FDIC-supervised institutions in understanding and complying with some of the more complex disclosure requirements imposed under RESPA. Attachment A is a response issued by the HUD General Counsel's Office to a series of questions raised by the Massachusetts Bankers Association in late 1999. The guidance answers questions relating to:
Attachment B amplifies the guidance provided in Attachment A about proper completion of the HUD-1 form. This response was prepared by HUD's General Counsel to answer questions posed in class action litigation brought against a financial institution in state court. The court requested clarification from HUD about the requirements of RESPA in situations where an institution marked up costs of third-party service providers, and then improperly disclosed those costs on the HUD-1 form. The attachment's main points are the following:
For more information, please contact Ken Baebel, Assistant Director in the FDIC's Division of Compliance and Consumer Affairs, on (202) 942-3086 (e-mail jbaebel@fdic.gov ) or Susan VanDenToorn, Counsel in the FDIC's Legal Division, on (202) 898-8707 (e-mail SVanDenToorn@fdic.gov ).
Distribution: FDIC-Supervised Banks (Commercial and Savings) NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (800-276-6003 or (703) 562-2200). |