Blog
Legal Issues, NARHUD withdraws new ‘required use’ definition
Shaun Donovan, secretary of the Department of Housing and Urban Development (HUD), announced Tuesday at NAR’s Midyear Meetings in Washington that HUD has withdrawn the proposed “required use†definition in the Real Estate Settlement and Procedures Act (RESPA) overhaul.
The new definition was the most controversial of the new RESPA revision introduced late last year. The new definition would have completely changed common practice within the new home construction industry, making it unlawful for builders to offer clients incentives such as discounts on construction or “upgrades†if the clients used builder-affiliated mortgage and/or title companies. The new definition was being contested by a number of opponents, lead by the National Home Builders Association.
Brett Woodburn, Esq. of Caldwell and Kearns, says, “We anticipate that HUD’s next effort to redefine ‘required use’ will be more broad as it is HUD’s goal to continue to make residential real estate transactions both ‘clear and transparent’ and to protect borrowers from being forced to use affiliated businesses. How broad or how far HUD will expand the ‘required use’ definition remains to be seen; as with all rule-making processes Congress, the public and industry representatives will have the ability to comment.â€
Until the new rule making process is complete, the current “required use†definition will stay in place.
|
Kim Shindle is the Manager of Media Relations at the Pennsylvania Association of Realtors®. |
No related posts.
Print This Article
