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U.S. Code as of:
01/19/04
Section 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
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(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.
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