HUD Asks for Public Comment on RESPA Rules Regarding Affiliated Business Arrangements

Through this Advance Notice of Proposed Rulemaking (ANPR), HUD commences the process of initiating rulemaking directed to strengthening and clarifying the prohibition against the “required use” of affiliated settlement service providers in residential mortgage transactions under section 8 of RESPA. HUD has received complaints that some homebuyers are committing to use a builder’s affiliated mortgage lender in exchange for construction discounts or discounted upgrades, without sufficient time to research their contracts or to comparison shop. The purpose of this ANPR is to solicit information that can be used to inform any future revision or clarification of the regulatory definition of the “required use” of affiliated settlement service providers in residential mortgage transactions.

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