(a)Use by settlement agent. The agent shall use the -1 statement in every involving a in which there is a borrower and a seller. For transactions in which there is a borrower and no seller, such as loans or subordinate lien loans, the -1 may be utilized by using the borrower's side of the -1 statement. Alternatively, the form -1A may be used for these transactions. The -1 or -1A may be modified as permitted under this part. Either the -1 or the -1A, as appropriate, shall be used for every -covered transaction, unless its use is specifically exempted. The use of the -1 or -1A is exempted for open-end lines of credit (home-equity plans) covered by the Truth in Lending Act and .
(b)Charges to be stated. The agent shall complete the -1 or -1A, in accordance with the instructions set forth in appendix A to this part. The must transmit to the agent all information necessary to complete the -1 or -1A.
(1)In general. The agent shall the actual charges paid by the borrower and seller on the -1, or by the borrower on the -1A. The agent must separately itemize each charge paid by the borrower and seller. All performed by or on behalf of the must be included in the 's own charge. Administrative and processing services related to must be included in the title underwriter's or title agent's own charge. The amount on the -1 or -1A for any itemized service cannot exceed the amount actually received by the provider for that itemized service, unless the charge is an average charge in accordance with paragraph (b)(2) of this section.
(2)Use of average charge.
(i) The average charge for a shall be no more than the average amount paid for a by one provider to another provider on behalf of borrowers and sellers for a particular class of transactions involving federally related loans. The total amounts paid by borrowers and sellers for a based on the use of an average charge may not exceed the total amounts paid to the providers of that service for the particular class of transactions.
(ii) The provider shall define the particular class of transactions for purposes of calculating the average charge as all transactions involving for:
(A) A period of time as determined by the provider, but not less than 30 calendar days and not more than 6 months;
(B) A geographic area as determined by the provider; and
(C) A type of loan as determined by the provider.
(iii) A provider may use an average charge in the same class of transactions for which the charge was calculated. If the provider uses the average charge for any transaction in the class, the provider must use the same average charge in every transaction within that class for which a GFE was provided.
(iv) The use of an average charge is not permitted for any if the charge for the service is based on the loan amount or property value. For example, an average charge may not be used for transfer taxes, interest charges, reserves or escrow, or any type of insurance, including insurance, title insurance, or hazard insurance.
(v) The provider must retain all documentation used to calculate the average charge for a particular class of transactions for at least 3 years after any for which that average charge was used.
(c)Violations of section 4 of RESPA ( 12 U.S.C. 2603). A violation of any of the requirements of this section will be deemed to be a violation of section 4 of . An inadvertent or technical error in completing the -1 or -1A shall not be deemed a violation of section 4 of if a revised -1 or -1A is provided in accordance with the requirements of this section within 30 calendar days after .