H.R. 2446

RESPA Home Warranty Clarification Act of 2012

Latest
Raw Text PDF XML

IIB

112th CONGRESS

2d Session

H. R. 2446

IN THE SENATE OF THE UNITED STATES

August 2, 2012

Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs

AN ACT

To clarify the treatment of homeowner warranties under current law, and for other purposes.

1.

Short title

This Act may be cited as the RESPA Home Warranty Clarification Act of 2012.

2.

Treatment of homeowner warranties

Section 8 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2607) is amended by adding at the end the following new subsection:

(e)

Homeowner warranties

(1)

In general

Nothing in this section, section 2, or section 3 shall be deemed to include, or be deemed to have included, homeowner warranties or similar residential service contracts for the repair or replacement of home system components or home appliances.

(2)

Notice by home warranty company

Any person that pays another person not employed by the person for selling, advertising, marketing, or processing, or performing an inspection in connection with, a homeowner warranty or similar residential service contract for the repair or replacement of home system components or home appliances shall include the following statement, in boldface type that is 10-point or larger, in any such warranty or contract offered or sold as an incident to or as part of any transaction involving the origination of a federally related mortgage loan:

NOTICE: THIS COMPANY MAY PAY PERSONS NOT EMPLOYED BY THE COMPANY FOR SELLING, ADVERTISING, MARKETING, OR PROCESSING, OR PERFORMING AN INSPECTION IN CONNECTION WITH, A HOMEOWNER WARRANTY OR SIMILAR RESIDENTIAL SERVICE CONTRACT FOR REPAIRING OR REPLACING HOME SYSTEM COMPONENTS OR HOME APPLIANCES.

(3)

Notice by real estate agent or broker

Any person who has contracted to receive payment from a provider of the services described in paragraph (1) for recommending the purchase of a home warranty or similar residential service contract, and is not an employee of such provider, shall provide the potential purchaser, upon first recommending the purchase of a homeowner warranty or similar residential service contract, a written notice containing the following language in boldface type that is 10-point or larger (with the bracketed matter being replaced with the information described by such bracketed matter):

NOTICE: THIS IS TO GIVE YOU NOTICE THAT [the provider of the notice] HAS RECEIVED OR WILL RECEIVE COMPENSATION FROM [the home warranty company] FOR [the residential service for which the notice provider is being compensated]. YOU ARE NOT REQUIRED TO PURCHASE A HOME WARRANTY OR A SIMILAR RESIDENTIAL SERVICE CONTRACT AND IF YOU CHOOSE TO PURCHASE SUCH COVERAGE YOU ARE FREE TO PURCHASE IT FROM ANOTHER PROVIDER.

.

Passed the House of Representatives August 1, 2012.

Karen L. Haas,

Clerk.