12 USC Section 2604
Special Information Booklets

Information by State  Esta página en español  Print version

TITLE 12--BANKS AND BANKING

CHAPTER 27--REAL ESTATE SETTLEMENT PROCEDURES

Sec. 2604. Special information booklets

a) Distribution by Secretary to lenders to help borrowers

The Secretary shall prepare and distribute booklets to help persons
borrowing money to finance the purchase of residential real estate
better to understand the nature and costs of real estate settlement
services. The Secretary shall distribute such booklets to all lenders
which make federally related mortgage loans.

(b) Form and detail; cost elements, standard settlement form, escrow
accounts, selection of persons for settlement services;
consideration of differences in settlement procedures

Each booklet shall be in such form and detail as the Secretary shall
prescribe and, in addition to such other information as the Secretary
may provide, shall include in clear and concise language--
(1) a description and explanation of the nature and purpose of
each cost incident to a real estate settlement;
(2) an explanation and sample of the standard real estate
settlement form developed and prescribed under section 2603 of this
title;
(3) a description and explanation of the nature and purpose of
escrow accounts when used in connection with loans secured by
residential real estate;
(4) an explanation of the choices available to buyers of
residential real estate in selecting persons to provide necessary
services incident to a real estate settlement; and
(5) an explanation of the unfair practices and unreasonable or
unnecessary charges to be avoided by the prospective buyer with
respect to a real estate settlement.

Such booklets shall take into consideration differences in real estate
settlement procedures which may exist among the several States and
territories of the United States and among separate political
subdivisions within the same State and territory.

(c) Estimate of charges

Each lender shall include with the booklet a good faith estimate of
the amount or range of charges for specific settlement services the
borrower is likely to incur in connection with the settlement as
prescribed by the Secretary.

(d) Distribution by lenders to loan applicants at time of receipt or
preparation of applications

Each lender referred to in subsection (a) of this section shall
provide the booklet described in such subsection to each person from
whom it receives or for whom it prepares a written application to borrow
money to finance the purchase of residential real estate. Such booklet
shall be provided by delivering it or placing it in the mail not later
than 3 business days after the lender receives the application, but no
booklet need be provided if the lender denies the application for credit
before the end of the 3-day period.

(e) Printing and distribution by lenders of booklets approved by
Secretary

Booklets may be printed and distributed by lenders if their form and
content are approved by the Secretary as meeting the requirements of
subsection (b) of this section.

(Pub. L. 93-533, Sec. 5, Dec. 22, 1974, 88 Stat. 1725; Pub. L. 94-205,
Sec. 4, Jan. 2, 1976, 89 Stat. 1158; Pub. L. 102-550, title IX,
Sec. 951, Oct. 28, 1992, 106 Stat. 3892.)

Amendments

1992--Subsec. (d). Pub. L. 102-550 substituted ``Such booklet shall
be provided by delivering it or placing it in the mail not later than 3
business days after the lender receives the application, but no booklet
need be provided if the lender denies the application for credit before
the end of the 3-day period.'' for ``Such booklet shall be provided at
the time of receipt or preparation of such application.''
1976--Subsecs. (c) to (e). Pub. L. 94-205 added subsec. (c),
redesignated former subsec. (c) as (d), substituted ``or for whom it
prepares a written application'' for ``an application'' and inserted
``or preparation'' after ``receipt'', and redesignated former subsec.
(d) as (e).

Effective Date of 1976 Amendment

Amendment by Pub. L. 94-205 effective Jan. 2, 1976, with the
Secretary authorized to suspend for up to 180 days from Jan. 2, 1976,
any provision of this section as amended by Pub. L. 94-205, see section
12 of Pub. L. 94-205, set out as a note under section 2602 of this
title.

Section Referred to in Other Sections

This section is referred to in section 2607 of this title.