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#2273087 - 07/20/22 04:24 AM RESPA 1024.20 - Homeownership Counseling
pskadot671 Offline
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Question: 1) Does the regulation require that the Homeownership Counseling Notice be provided to “All Applicants” or just to the “Main Applicant”? I cite Section 1450 of the Dodd-Frank Act[ which states that it is required to be provided to federal related mortgage loan applicants. (Note: It makes reference to loan applicants, plural form, as compared to singular.

I'm trying not to over interpret the regulation but would like some clarity. Appreciate your response.

Thank you in advance.


Regulations citation: § 1024.20 List of homeownership counseling organizations
(a) Provision of list.
a. (1) Except as otherwise provided in this section, not later than three business days after a lender, mortgage broker, or dealer receives an application, or information sufficient to complete an application, the lender must provide the loan applicant with a clear and conspicuous written list of homeownership counseling organizations that provide relevant counseling services in the loan applicant's location. The list of homeownership counseling organizations distributed to each loan applicant under this section shall be obtained no earlier than 30 days prior to the time when the list is provided to the loan applicant …

Section 1450 of the Dodd-Frank Act
The 2013 HOEPA Final Rule implemented numerous Dodd-Frank Act requirements. Section 1450 of the Dodd-Frank Act amended section 5(c) of the Real Estate Settlement Procedures Act (RESPA) to require lenders to provide federally related mortgage loan applicants with a “reasonably complete or updated list of homeownership counselors who are certified pursuant to section 106(e) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) and located in the area of the lender.”

The RESPA Homeownership Counseling Amendments implements this section 1450 amendment in Regulation X § 1024.20(a). In implementing this Dodd-Frank Act requirement, § 1024.20(a)(1) requires lenders to provide the loan applicant with a written list of homeownership counseling organizations that provide relevant services in the loan applicant’s location.

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HOEPA and Homeowner Counseling Rule
#2273092 - 07/20/22 01:38 PM Re: RESPA 1024.20 - Homeownership Counseling pskadot671
rlcarey Online
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rlcarey
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I think pretty much says it all: The list of homeownership counseling organizations distributed to each loan applicant under this section shall be obtained no earlier than 30 days prior to the time when the list is provided to the loan applicant from either:

Although, I have not seen regulators get too excited over this.
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#2273102 - 07/20/22 03:18 PM Re: RESPA 1024.20 - Homeownership Counseling pskadot671
Dan Persfull Offline
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Dan Persfull
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(6) If a mortgage loan transaction involves more than one lender, only one list of homeownership counseling organizations required under this section shall be given to the loan applicant and the lenders shall agree among themselves which lender will comply with the requirements that this section imposes on any or all of them. If there is more than one loan applicant, the required list of homeownership counseling organizations may be provided to any loan applicant with primary liability on the mortgage loan obligation.

FWIW.
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#2273105 - 07/20/22 03:36 PM Re: RESPA 1024.20 - Homeownership Counseling pskadot671
rlcarey Online
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Good lord Dan - thanks. I thought there was something and then I thought I just made it up in my mind.
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#2273242 - 07/21/22 11:14 PM Re: RESPA 1024.20 - Homeownership Counseling pskadot671
pskadot671 Offline
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Dan you mentioned: (6) If a mortgage loan transaction involves more than one lender, only one list of homeownership counseling organizations required under this section shall be given to the loan applicant and the lenders shall agree among themselves which lender will comply with the requirements that this section imposes on any or all of them. If there is more than one loan applicant, the required list of homeownership counseling organizations may be provided to any loan applicant with primary liability on the mortgage loan obligation.

FWIW.

Concern: The section makes reference to a mortgage lending that involves more than one lender. If further says that if there is more than one loan applicant, the notice may be provided to any loan applicant with the primary liability.

Questions:
1) Knowing that this section makes this reference does it only pertain to multiply lenders?
2) Or can the last sentence referencing, if there is more than one loan applicant be construed to mean upon receipt of receiving a loan application and that there is a borrower and co-borrower, that only one notice can be given to either applicant?

Just trying to get more clarity to section (6) as compared to § 1024.20 and Section 1450 of the Dodd-Frank Act

Thank you in advance

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#2273246 - 07/22/22 11:18 AM Re: RESPA 1024.20 - Homeownership Counseling pskadot671
rlcarey Online
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rlcarey
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Not Dan, but there are two very separate and distinct clauses in that paragraph.
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#2273299 - 07/22/22 06:52 PM Re: RESPA 1024.20 - Homeownership Counseling pskadot671
Dan Persfull Offline
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Dan Persfull
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As Randy stated there are two distinct comments in that paragraph.

6) If a mortgage loan transaction involves more than one lender, only one list of homeownership counseling organizations required under this section shall be given to the loan applicant and the lenders shall agree among themselves which lender will comply with the requirements that this section imposes on any or all of them.

If there is more than one loan applicant, the required list of homeownership counseling organizations may be provided to any loan applicant with primary liability on the mortgage loan obligation.


If there is more than one applicant then that would indicate there are applicants (plural) and your concern is with the word applicants being used in Dodd Frank and if that would require all applicants to receive the notice. 1024.20(a)(6) clarifies that only one of the applicants have to receive the notice.
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#2273300 - 07/22/22 07:06 PM Re: RESPA 1024.20 - Homeownership Counseling pskadot671
rlcarey Online
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rlcarey
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And that then just aligns that disclosure requirement with the Regulation Z requirements for initial disclosures.

Official Interpretation
17(d) Multiple Creditors; Multiple Consumers

2. Multiple consumers. When two consumers are joint obligors with primary liability on an obligation, the disclosures may be given to either one of them. If one consumer is merely a surety or guarantor, the disclosures must be given to the principal debtor.
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