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Title 12, Banks and BankingRelease 119-110

§2602 Definitions

Title 12 › CHAPTER 27 — REAL ESTATE SETTLEMENT PROCEDURES › § 2602

Last updated Sep 23, 2026|Official source

Summary

Defines key words used in this chapter. "Federally related mortgage loan" means a loan (not temporary construction financing) secured by a first or subordinate lien on residential property for one to four families, including condos and co-ops and refinances, that also meets one of several federal connections (made by a federally insured or federally regulated lender; insured, guaranteed, or assisted by a federal officer, agency, or HUD program; intended to be sold to the Federal National Mortgage Association, Government National Mortgage Association, or Federal Home Loan Mortgage Corporation or to a financial institution the FHLMC will buy from; or made by a "creditor" as defined in 15 U.S.C. 1602(f) who makes or invests more than $1,000,000 per year in residential loans, excluding state agencies). "Thing of value" means any payment, advance, funds, loan, service, or other consideration. "Settlement services" means services tied to a real estate closing (for example, title work, title insurance, attorneys, document prep, surveys, credit reports, appraisals, inspections, agent/broker services, loan origination tasks, and closing). "Title company" means an institution qualified to issue title insurance and its agents. "Person" means individuals, corporations, associations, partnerships, and trusts. "Secretary" means the Secretary of Housing and Urban Development. "Affiliated business arrangement" means an arrangement where someone able to refer settlement business (or their associate) has an affiliate tie or owns more than 1 percent of a settlement-service provider and then refers or influences referrals to that provider. "Associate" means a spouse, parent, child, a business that controls or is controlled by the referrer, an employer/officer/director/partner/franchisor/franchisee, or anyone who has an agreement to help the referrer profit from referrals. "Bureau" means the Bureau of Consumer Financial Protection.

Full Legal Text

Title 12, §2602

Banks and Banking, Source: USLM XML via OLRC

For purposes of this chapter—
(1)the term “federally related mortgage loan” includes any loan (other than temporary financing such as a construction loan) which—
(A)is secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) designed principally for the occupancy of from one to four families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property; and
(B)(i)is made in whole or in part by any lender the deposits or accounts of which are insured by any agency of the Federal Government, or is made in whole or in part by any lender which is regulated by any agency of the Federal Government, or
(ii)is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by the Secretary or any other officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary or a housing or related program administered by any other such officer or agency; or
(iii)is intended to be sold by the originating lender to the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, or a financial institution from which it is to be purchased by the Federal Home Loan Mortgage Corporation; or
(iv)is made in whole or in part by any “creditor”, as defined in section 1602(f) of title 15, who makes or invests in residential real estate loans aggregating more than $1,000,000 per year, except that for the purpose of this chapter, the term “creditor” does not include any agency or instrumentality of any State;
(2)the term “thing of value” includes any payment, advance, funds, loan, service, or other consideration;
(3)the term “Settlement services” includes any service provided in connection with a real estate settlement including, but not limited to, the following: title searches, title examinations, the provision of title certificates, title insurance, services rendered by an attorney, the preparation of documents, property surveys, the rendering of credit reports or appraisals, pest and fungus inspections, services rendered by a real estate agent or broker, the origination of a federally related mortgage loan (including, but not limited to, the taking of loan applications, loan processing, and the underwriting and funding of loans), and the handling of the processing, and closing or settlement;
(4)the term “title company” means any institution which is qualified to issue title insurance, directly or through its agents, and also refers to any duly authorized agent of a title company;
(5)the term “person” includes individuals, corporations, associations, partnerships, and trusts;
(6)the term “Secretary” means the Secretary of Housing and Urban Development;
(7)the term “affiliated business arrangement” means an arrangement in which (A) a person who is in a position to refer business incident to or a part of a real estate settlement service involving a federally related mortgage loan, or an associate of such person, has either an affiliate relationship with or a direct or beneficial ownership interest of more than 1 percent in a provider of settlement services; and (B) either of such persons directly or indirectly refers such business to that provider or affirmatively influences the selection of that provider;
(8)the term “associate” means one who has one or more of the following relationships with a person in a position to refer settlement business: (A) a spouse, parent, or child of such person; (B) a corporation or business entity that controls, is controlled by, or is under common control with such person; (C) an employer, officer, director, partner, franchisor, or franchisee of such person; or (D) anyone who has an agreement, arrangement, or understanding, with such person, the purpose or substantial effect of which is to enable the person in a position to refer settlement business to benefit financially from the referrals of such business; and
(9)the term “Bureau” means the Bureau of Consumer Financial Protection.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 1602(f) of title 15, referred to in par. (1)(B)(iv), was redesignated section 1602(g) of title 15 by Pub. L. 111–203, title X, § 1100A(1)(A), July 21, 2010, 124 Stat. 2107.

Amendments

2010—Par. (9). Pub. L. 111–203 added par. (9). 1996—Par. (7). Pub. L. 104–208 substituted “affiliated business arrangement” for “controlled business arrangement”. 1992—Par. (1)(A). Pub. L. 102–550, § 908(b), inserted “or subordinate” after “first” and “, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property” after “families”. Par. (3). Pub. L. 102–550, § 908(a), inserted “the origination of a federally related mortgage loan (including, but not limited to, the taking of loan applications, loan processing, and the underwriting and funding of loans),” after “broker,”. 1983—Pars. (7), (8). Pub. L. 98–181 added pars. (7) and (8). 1976—Par. (1). Pub. L. 94–205, § 2(1), inserted “(other than temporary financing such as a

Construction

loan)” in introductory text. Par. (1)(A). Pub. L. 94–205, § 2(2), inserted “a first lien on” after “is secured by”. Par. (1)(B)(iii). Pub. L. 94–205, § 2(3)–(5), substituted “is intended to be sold by the originating lender to” for “is eligible for purchase by” and “a” and “is to” for “from any” and “could”, respectively, and struck out “or” after “the Government National Mortgage Association”. Par. (1)(B)(iv). Pub. L. 94–205, § 2(6), inserted “, except that for the purpose of this chapter, the term ‘creditor’ does not include any agency or instrumentality of any State” after “more than $1,000,000 per year”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2010 AmendmentAmendment by Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees.

Effective Date

of 1992 Amendment Pub. L. 102–550, title IX, § 908(d), Oct. 28, 1992, 106 Stat. 3874, provided that: “This section [amending this section and enacting provisions set out below] shall take effect on the date of enactment of this Act [Oct. 28, 1992] and shall not apply retroactively.”

Effective Date

of 1983 Amendment Pub. L. 98–181, title I [title IV, § 461(f)], Nov. 30, 1983, 97 Stat. 1232, provided that: “The

Amendments

made by this section [amending this section and section 2607, 2614, and 2617 of this title] shall become effective on January 1, 1984.”

Effective Date

of 1976 Amendment Pub. L. 94–205, § 12, Jan. 2, 1976, 89 Stat. 1160, provided that: “The provisions of this Act and the

Amendments

made hereby [enacting section 2617 of this title, amending this section, section 2603, 2604, 2607, 2609, and 2616 of this title, and section 1631 of Title 15, Commerce and Trade, repealing section 2605 and 2606 of this title, and enacting and amending provisions set out as notes under section 2601 of this title] shall become effective upon enactment [Jan. 2, 1976]. The Secretary may suspend for up to one hundred and eighty days from the date of enactment of this Act [Jan. 2, 1976] any provision of section 4 and section 5 of the Real Estate Settlement Procedures Act of 1974 [section 2603 and 2604 of this title], as amended by this Act.”

Effective Date

Section effective 180 days after Dec. 22, 1974, see section 20 of Pub. L. 93–533, set out as a note under section 2601 of this title.

Regulations

Pub. L. 102–550, title IX, § 908(c), Oct. 28, 1992, 106 Stat. 3874, provided that: “The Secretary of Housing and Urban Development shall issue

Regulations

to implement the

Amendments

made by this section [amending this section] not later than the expiration of the 180-day period beginning on the date of the enactment of this Act [Oct. 28, 1992]. The

Regulations

shall be issued after notice and opportunity for public comment pursuant to the provisions of section 553 of title 5, United States Code (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such section).”

Reference

Citations & Metadata

Citation

12 U.S.C. § 2602

Title 12, Banks and Banking

Last Updated

Sep 23, 2026

Release point: 119-110