On November 17, 2008, the Department of Housing and Urban Development (“HUD”) published its final rule amending Regulation X and 24 CFR §203.27 [Single Family Mortgage Insurance]. The final rule has two effective dates. Certain sections of the final rule are effective January 16, 2009, and we will be issuing a memorandum on those sections in the near future. Other sections of the final rule are effective on January 1, 2010, and we will be issuing a second memorandum on those sections at a later date. The purpose of this memorandum is simply to notify you of HUD’s publication of the final rule and to provide you with the web pages from which you may download a copy in either hypertext markup language (HTML) or portable document format (PDF). Overview of Final Rule: The final rule is intended to: (i) improve and standardize the Good Faith Estimate (GFE); (ii) ensure that page 1 of the GFE provides a clear summary of the loan terms and total settlement charges; (iii) provide more accurate estimates of costs of settlement services shown on the GFE; (iv) improve disclosure of yield spread premiums (YSPs); (v) facilitate comparison of the GFE and the HUD-1/HUD-1A Settlement Statements; (vi) ensure that at settlement borrowers are aware of final costs as they relate to their particular mortgage loan and settlement transaction; (vii) clarify HUD-1 instructions; (viii) expressly state that RESPA permits the listing of an average charge on the HUD-1; and, (ix) strengthen the prohibition against requiring the use of affiliated businesses. Text of Final Rule: The text of the final rule can be printed by clicking on: 1. HTML Format: http://edocket.access.gpo.gov/2008/E8-27070.htm. 2. PDF Format: http://edocket.access.gpo.gov/2008/pdf/E8-27070.pdf. Effective Dates for Final Rule: (1) The definition of “Required use” in Section 3500.2, Sections 3500.8(b) [Use of HUD-1/HUD-1A – Charges to be stated], 3500.17 [Escrow Accounts], 3500.21 [Mortgage Servicing Transfers], 3500.22 [Severability], 3500.23 [ESIGN applicability], and Appendices E [Escrow Account Analysis Examples] and MS-1 [Servicing Disclosure Statement] are applicable commencing January 16, 2009. (2) The definitions other than “Required use” in Section 3500.2, Section 3500.7 [GFE], Sections 3500.8(a) and(c) [Use of HUD-1/HUD-1A – By settlement agent; Violations], Section 3500.9 [Reproduction of settlement statements], Appendices A [Instructions for Completing HUD-1/HUD-1A] and C [Instructions for Completing GFE], and Section 203.27 are applicable commencing January 1, 2010.

Complete Memorandum