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(a) Lender to provide
special information booklet. Subject to the exceptions set forth
in this paragraph, the lender shall provide a copy of the special
information booklet to a person from whom the lender receives, or for
whom the lender prepares, a written application for a federally
related mortgage loan. When two or more persons apply together for a
loan, the lender is in compliance if the lender provides a copy of the
booklet to one of the persons applying.
(1) The lender shall provide the special information booklet by
delivering it or placing it in the mail to the applicant not later
than three business days (as that term is defined in Sec. 3500.2)
after the application is received or prepared. However, if the lender
denies the borrower's application for credit before the end of the
three-business- day period, then the lender need not provide the
booklet to the borrower. If a borrower uses a mortgage broker, the
mortgage broker shall distribute the special information booklet and
the lender need not do so. The intent of this provision is that the
applicant receive the special information booklet at the earliest
possible date.
(2) In the case of a federally related mortgage loan involving
an open-ended credit plan, as defined in Sec. 226.2(a)(20) of
Regulation Z (12 CFR), a lender or mortgage broker that provides the
borrower with a copy of the brochure entitled ``When Your Home is On
the Line: What You Should Know About Home Equity Lines of Credit'', or
any successor brochure issued by the Board of Governors of the Federal
Reserve System, is deemed to be in compliance with this section.
(3) In the categories of transactions set forth at the end of
this paragraph, the lender or mortgage broker does not have to provide
the booklet to the borrower. Under the authority of section 19(a) of
RESPA (12 U.S.C. 2617(a)), the Secretary may issue a revised or
separate special information booklet that deals with these
transactions, or the Secretary may chose to endorse the forms or
booklets of other Federal agencies. In such an event, the requirements
for delivery by lenders and the availability of the booklet or
alternate materials for these transactions will be set forth in a
Notice in the Federal Register. This paragraph shall apply to the
following transactions:
(i) Refinancing transactions;
(ii) Closed-end loans, as defined in 12 CFR 226.2(a)(10) of
Regulation Z, when the lender takes a subordinate lien;
(iii) Reverse mortgages; and
(iv) Any other federally related mortgage loan whose purpose is
not the purchase of a 1- to 4-family residential property.
(b) Revision. The Secretary may from time to time revise the
special information booklet by publishing a notice in the Federal
Register.
(c) Reproduction. The special information booklet may be
reproduced in any form, provided that no change is made other than as
provided under paragraph (d) of this section. The special information
booklet may not be made a part of a larger document for purposes of
distribution under RESPA and this section. Any color, size and quality
of paper, type of print, and method of reproduction may be used so
long as the booklet is clearly legible.
(d) Permissible changes. (1) No changes to, deletions from, or
additions to the special information booklet currently prescribed by
the Secretary shall be made other than those specified in this
paragraph (d) or any others approved in writing by the Secretary. A
request to the Secretary for approval of any changes shall be
submitted in writing to the address indicated in Sec. 3500.3, stating
the reasons why the applicant believes such changes, deletions or
additions are necessary.
(2) The cover of the booklet may be in any form and may contain
any drawings, pictures or artwork, provided that the words
``settlement costs'' are used in the title. Names, addresses and
telephone numbers of the lender or others and similar information may
appear on the cover, but no discussion of the matters covered in the
booklet shall appear on the cover.
(3) The special information booklet may be translated into
languages other than English.
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