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HUD may pull restrictions on builders’ incentives

No new 'required use' provision till July -- if ever
Published on Mar 10, 2009

Federal regulators propose to withdraw a RESPA rule change that would bar homebuilders from offering consumers incentives that require them to use the builders' affiliated mortgage and title insurance companies.It's unclear whether the change -- which the National Association of Home Builders has gone to court to block -- will actually be scrapped, and if so, whether regulators will go back to the drawing board and launch a public process to rewrite it. About all that's certain is that the Department of Housing and Urban Development is now promising that restrictions on homebuilder incentives originally slated to to take effect in January won't be implemented until mid-summer -- if ever.At issue is a provision of the Real Estate Settlement Procedures Act, or RESPA, that allows real estate brokers, builders, title insurers and others to split profits generated by joint ventures known as affiliated businesses. Consumers must be informed about the relationships between the companies and c...

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