3.1- What is Real Estate Settlement Procedures Act (RESPA), 12 CFR Part 1024 (Regulation X)


The Real Estate Settlement Procedures Act became effective on June 20th, 1975. The Act requires lenders, mortgage brokers, or servicers of home loans to provide pertinent and timely disclosures regarding the nature and costs of the Real Estate settlement process. The Act prohibits acts such as kickbacks, and places limitations upon the use of escrow accounts. The Department of Housing and Urban Development (HUD) originally promulgated Regulation X which implements RESPA.

RESPA has been amended by Congress significantly since it was enacted.

1990-
The National Affordable Housing Act of 1990 amended RESPA to require detailed disclosures concerning the transfer, sale, or assignment of mortgage servicing. It also requires disclosures for mortagage escrow accounts at closing and annually thereafter, itemizing the charges to be paid by the borrower and what is paid out of the account by the servicer.

1992-
RESPA was amended by Congress to to cover subordinate lien loans.

1996-
When the Economic Growth and Regulatory Paperwork Reduction Act was enacted by Congress, RESPA was further amended to clarify certain definitions including "controlled business arrangement" which was changed to "affiliated business arrangement". The changes also reduced the disclosures under the mortgage servicing provisions of RESPA.

2008-
HUD issued a RESPA Reform Rule (73 Fed. Reg. 68204, November 17, 2008) that included substantive and technical changes to the existing RESPA regulations and different implementation dates for various provisions. Substantive changes included a standard Good Faith Estimate form and revised HUD-1 Settlement Statement that were required as of January 1, 2010. Technical changes, including streamlined mortgage servicing disclosure languge, elimination of outdated escrow account provisions, and a provision permitting an "average charge" to be listed on the Good Faith Estimate and HUD-1 Settlement Statement, took effect on January 16, 2009. In Addition, HUD clarified that all disclosures required by RESPA are permitted to be provided electronically, in accordance with the Electronic Signatures in Global and National Commerce Act (E-Sign).

2010-
The Dodd-Frank Wall Street Reform and Consumer Protection Act  enacted July 10, 2010 (Dodd-Frank Act) granted the rule making authority under RESPA to the Consumer Financial Protection Bureau (CFPB) and, with respect to entities under its jurisdiction, generally granted authority to the CFPB to supervise for and enforce compliance with RESPA and its implementing regulations.

2011-
In December 2011, the CFPB restated HUD's implementing regulation at 12 CFR Part 1024 (76 Fed Reg. 78978)

2013-
On December 31st, 2013, the CFPB published final rules implementing sections of the Dodd-Frank Act, which direct the CFPB to publish a single, integrated disclosure for mortgage transactions, which includes mortgage disclosure requirements under the Truth in Lending Act (TILA) and certain sections of RESPA. This amendment is referred to as the "TILA-RESPA Integrated Disclosure Rule" or TRID.