A proposed clarification of the Real Estate Settlement Procedures Act published last week by the Department of Housing and Urban Development could make lenders subject to retroactive enforcement for accepting referral fees, kickbacks or other unearned fees on mortgage transactions.

In proposed amendments to Regulation X the agency is taking the position that because the Housing and Community Development Act of 1992 merely confirms HUD's long-held enforcement position of viewing the activities of lenders and brokers as "covered settlement services"--rather than setting out an entirely new policy on this issue--the law's language concerning the nonretroactivity of the amendment therefore does not affect the agency's pending enforcement efforts.

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