In the December 1, 2010 issue of the Federal Register, HUD provided guidance by answering certain questions raised in the public comments HUD received since publishing its Interpretative Rule in the June 25, 2010 issue of the Federal Register regarding the propriety under Section 8 of RESPA of compensation paid by a home warranty company (HWC) to a real estate broker or agent in connection with the sale of a homeowner warranty to a homebuyer or seller in a transaction involving a federally related mortgage loan. The Interpretative Rule was the subject of our memorandum of the same date published on our Website www.bmandg.com. HUD received 72 comments responding to the Interpretative Rule and, after reviewing the comments, determined that changes to the Interpretive Rule are not needed. However, in its December 1 2010 Federal Register publication, HUD is providing guidance for the Interpretative Rule by answering seven questions raised in the comments. Attached to this memorandum are the Interpretative Rule published in the June 25, 2010 Federal Register and HUD’s Guidance on the Interpretative Rule published in the December 1, 2010 Federal Register. In reading the attached Interpretive Rule and its Guidance, please keep in mind that although the Interpretative Rule is limited to the specific compensation issue addressed by the Rule, the rationale HUD used in issuing this Interpretative Rule may easily be applied to any potential “compensated referral” situation involving a federally related mortgage loan.