§ 2604.
(b)
Contents
Each booklet shall be in such form and detail as the Director shall prescribe and, in addition to such other information as the Director may provide, shall include in plain and understandable language the following information:
(1)
A description and explanation of the nature and purpose of the costs incident to a real estate settlement or a federally related mortgage loan. The description and explanation shall provide general information about the mortgage process as well as specific information concerning, at a minimum—
(B)
prepayment penalties;
(C)
the advantages of prepayment; and
(D)
the trade-off between closing costs and the interest rate over the life of the loan.
(3)
A list and explanation of lending practices, including those prohibited by the Truth in Lending Act or other applicable Federal law, and of other unfair practices and unreasonable or unnecessary charges to be avoided by the prospective buyer with respect to a real estate settlement.
(4)
A list and explanation of questions a consumer obtaining a federally related mortgage loan should ask regarding the loan, including whether the consumer will have the ability to repay the loan, whether the consumer sufficiently shopped for the loan, whether the loan terms include prepayment penalties or balloon payments, and whether the loan will benefit the borrower.
(5)
An explanation of the right of rescission as to certain transactions provided by sections 125 and 129 of the Truth in Lending Act [
15 U.S.C. 1635, 1639].
(6)
A brief explanation of the nature of a variable rate mortgage and a reference to the booklet entitled “Consumer Handbook on Adjustable Rate Mortgages”, published by the Director, or to any suitable substitute of such booklet that the Director may subsequently adopt pursuant to such section.
(7)
A brief explanation of the nature of a home equity line of credit and a reference to the pamphlet required to be provided under section 127A of the Truth in Lending Act [
15 U.S.C. 1637a].
(8)
Information about homeownership counseling services made available pursuant to
section 1701x(a)(4) of this title, a recommendation that the consumer use such services, and notification that a list of certified providers of homeownership counseling in the area, and their contact information, is available.
(9)
An explanation of the nature and purpose of escrow accounts when used in connection with loans secured by residential real estate and the requirements under
section 2609 of this title regarding such accounts.
(10)
An explanation of the choices available to buyers of residential real estate in selecting persons to provide necessary services incidental to a real estate settlement.
(11)
An explanation of a consumer’s responsibilities, liabilities, and obligations in a mortgage transaction.
(12)
An explanation of the nature and purpose of real estate appraisals, including the difference between an appraisal and a home inspection.
(13)
Notice that the Office of Housing of the Department of Housing and Urban Development has made publicly available a brochure regarding loan fraud and a World Wide Web address and toll-free telephone number for obtaining the brochure.
(14)
An explanation of flood insurance and the availability of flood insurance under the National Flood Insurance Program or from a private insurance company, whether or not the real estate is located in an area having special flood hazards, and the following statement: “Although you may not be required to maintain flood insurance on all structures, you may still wish to do so, and your mortgage lender may still require you to do so to protect the collateral securing the mortgage. If you choose to not maintain flood insurance on a structure, and it floods, you are responsible for all flood losses relating to that structure.”.
The booklet prepared pursuant to this section shall take into consideration differences in real estate settlement procedures that may exist among the several States and territories of the United States and among separate political subdivisions within the same State and territory.
([Pub. L. 93–533, § 5], Dec. 22, 1974, [88 Stat. 1725]; [Pub. L. 94–205, § 4], Jan. 2, 1976, [89 Stat. 1158]; [Pub. L. 102–550, title IX, § 951], Oct. 28, 1992, [106 Stat. 3892]; [Pub. L. 111–203, title X, § 1098(3)], title XIV, § 1450, July 21, 2010, [124 Stat. 2104], 2174; [Pub. L. 112–141, div. F, title II, § 100222], July 6, 2012, [126 Stat. 934]; [Pub. L. 113–89, § 13(b)], Mar. 21, 2014, [128 Stat. 1026].)