On November 17, 2008, the Department of Housing and Urban Development (“HUD”) published in the Federal Register (pages 68204 – 68288) its final rule (“final rule”) amending Regulation X. The final rule has two effective dates. Certain sections of the final rule are effective January 16, 2009 (and were the subject of our November 26, 2008 memorandum), and other sections of the final rule are effective January 1, 2010. Except for the brief discussion of HUD’s recent withdrawal of the final rule’s revised definition of “required use,” this memorandum will address those final rule changes that are effective January 1, 2010. On November 26, 2008, we issued a memorandum discussing the following provisions of the final rule: (i) definition of “Required use” in Section 3500.2; (ii) Section 3500.8(b) [Use of HUD-1/HUD-1A – Charges to be stated]; (iii) Section 3500.17 [Escrow Accounts]; (iv) Section 3500.21 [Mortgage Servicing Transfers]; (v) Section 3500.22 [Severability]; (vi) Section 3500.23 [ESIGN applicability]; (vii) Appendices E [Escrow Account Analysis Examples] and MS-1 [Servicing Disclosure Statement]. This memorandum will address the definitions in Section 3500.2 (other than “Required use”); Sections 3500.7 [GFE], 3500.8(a) and (c) [Use of HUD-1/HUD-1A – by settlement agent; Violations], 3500.9 [Reproduction of settlement statements]; Appendix A [Instructions for Completing HUD-1/HUD-1A; Standardized HUD-1/HUD-1A Forms]; Appendix C [Instructions for Completing GFE; Standardized GFE Form]; and, Section 203.27 [Single Family Mortgage Insurance – Charges, fees or discounts].

Complete Memorandum