Sec. 3500.6 Special information booklet at time of loan application.
(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
(3) The special information booklet may be translated into languages
other than English.
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