Opinion ID: 378909
Heading Depth: 2
Heading Rank: 1

Heading: Uniform settlement statement

Text: 23 As originally enacted, the Real Estate Settlement Procedures Act authorized the Secretary of Housing and Urban Development to develop a standard real estate settlement form to be utilized in all federally related mortgage loans. 12 U.S.C. § 2603. 2 The costs of settlement were to be disclosed to the borrower prior to closing by means of this standard form. 12 U.S.C. § 2605. 3 Pursuant to this authority, the Secretary developed a uniform settlement statement and promulgated regulations controlling the extent to which the form of the statement could be varied. 24 (5) No changes in the size or type style of print or the layout of the first two pages of the form shall be made, except as follows: (A) The layout of the form may only be reset in type if such type style is approximately the same size and appearance, is easily readable, and the entire form layout is identical to the form as prescribed by HUD; and (B) where necessary to accommodate computer equipment, the first two pages of the form may be printed in a larger size of print and different type style and the distance between lines may be increased, but not decreased, but there shall be no other change in the layout and placement of information on the form. As to the third page, see Regulation Z, 12 CFR Part 226, and the Federal Reserve Board instructions in Appendix B. 25 24 C.F.R. § 82.6(b)(5). 4 With the exception of these changes and some other minor ones, any modifications in the uniform settlement statement were to be approved by the Secretary. 24 C.F.R. § 82.6(b)(13). 26 The Vegas contend that the settlement statement that they received from First Federal impermissibly varied from the one prescribed by the Secretary. The settlement statement provided by First Federal capitalized certain items that were not capitalized in the uniform settlement statement and failed to capitalize other items. The Vegas maintain that even though the deviations were minor, they constitute violations of the Real Estate Settlement Procedures Act. 27 It is at least arguable that the changes in the capitalization of certain items in the settlement statement were permissible under 24 C.F.R. § 82.6(b)(5) (A). 5 The type style was approximately the same size and appearance, was easily readable, and the layout of the form was approved by the Secretary. 6 But even assuming that the changes were not technically within the ambit of 24 C.F.R. § 82.6 we do not believe that the Real Estate Settlement Procedures Act creates such a rigid and inflexible standard so as to impose civil liability for deviations from the uniform settlement statement which could not possibly impair the effectiveness of such statements. In some cases, even technical changes in the uniform settlement statement represent a threat to the basic purposes of the statement. Thus, even minor changes in the language of the uniform settlement statement would create confusion and hinder the comparison of settlement costs by consumers. Changes in the format of the statement would generate similar difficulties. Moreover, significant changes in the type style might also prevent the meaningful disclosure of settlement costs to the consumer. But the settlement statement in this case presents none of these potential dangers. The Vegas received a settlement statement utilizing the precise terms prescribed by regulation and in a format approved by the Secretary. The changes in the capitalization of certain terms did not obfuscate any of the information contained in the settlement statement. Under such circumstances, we do not believe that such changes constituted a violation of the Real Estate Settlement Procedures Act.