Last week was a watershed for borrowers, lenders, mortgage brokers and others covered by the Real Estate Settlement Procedures Act. Not only did the Department of Housing and Urban Development give final approval to regulations that took nearly six years to write, but President Bush on Oct. 28 signed into law the Housing and Community Development Act (H.R. 5334), which places refinancings under Respa.

Both the law and the regulation specify that a "settlement service" under Respa includes a federally related (insured) mortgage loan. A 1984 case (U.S. vs. Graham Mortgage Corp.). the U.S. Court of Appeals for the 6th Circuit in Cincinnati ruled that it was unclear whether a mortgage loan was a settlement service under Respa. Nonetheless, HUD has continued to treat mortgage loans as a settlement service.

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