RESPA Home Clarification Act
In March, The U.S. House Financial ServiceS Committee passed the RESPA Home Warranty Clarification Act, which clarifies that home warranties are not a settlement service under RESPA. For nearly two decades HUD allowed real estate professionalS to be compensated on a per transaction basis for the work they do in selling warranties. HUD then issued an informal letter in 2008 that contradicted that accepted practice leading to confusion and lawsuits across the nation. HUD compounded the problem by issuing an interpretive rule that led to even more lawsuits. The bill, if enacted into law, would end the continuing litigation and provide certainty to real estate professionals, home warranty companies, and consumers.