For the First Time NHD Statements Will Be Considered as Part of

Regulated Real Estate Settlement Service

HUD Lawsuit Resolved

LOS ANGELES–(EMWNews)–In a dramatic example of how the government and the real estate industry

are working together to establish new practices for California home

buyers and sellers, Property I.D., America’s

leading provider of real estate property disclosure reports, today

announced its settlement agreement with the U.S. Department Of Housing

And Urban Development (HUD), which will now require that all Natural

Hazard Disclosure Statements (NHDS) be considered and treated as real

estate settlement services subject to the federal Real Estate Settlement

Procedures Act (RESPA).

Prior to this settlement, the NHDS was not listed as a real estate

settlement service subject to RESPA; the NHDS was not generally treated

as a settlement cost to be paid through escrow; and transactions often

closed without an NHD report. Notably, HUD did not require an NHDS or an

NHD report for federal mortgage loan transactions (through Fannie Mae

and Freddie Mac) in California. By this landmark settlement, Property

I.D. and HUD have agreed that the NHDS and the NHD report industry will

now be subject to HUD’s regulation under

RESPA. This should provide further protection for California home buyers

and sellers because the previously unregulated hazard disclosure process

will be treated as part of the regulated real estate settlement process.

Property I.D. defended the need for clear rules for the industry and for

consumers, and this settlement agreement takes an important step in that

direction. Because RESPA is a federal statute, HUD would have ordinarily

been required to amend the statute through Congress to add the NHDS as a

defined settlement service. The settlement agreement bypasses this

process because Property I.D. has voluntarily agreed to treat the NHDS

and NHD reports as subject to RESPA. Given HUD’s

clearly articulated views on the applicability of RESPA, it is expected

that other NHD report providers in California will follow Property I.D.’s

lead. Property I.D. is the industry’s largest

provider of NHD reports.

“Property I.D.’s

settlement with HUD presents the opportunity for an entire industry to

redefine itself, its role, and its relationship with brokerages, agents

and escrow officers,” said Andrew Gilford,

partner with Weston, Benshoof, Rochefort, Rubalcava and MacCuish, who

represented Property I.D. through this process.

In the settlement agreement, Property I.D. makes clear that it is

agreeing to resolve this matter without any requirement that it pay

money or penalties to HUD and without any finding of liability or

wrongdoing against it or the real estate brokerages affiliated with

Property I.D., including the Cendant Corporation, NRT/Coldwell Banker

Residential Brokerage Corporation, Prudential California Realty, and

others.

No claims were ever made about the veracity of Property I.D.’s

comprehensive and accurate disclosure reports which are considered

without equal.

Consumers are the ultimate beneficiary of the settlement because the NHD

report industry was previously unregulated, resulting in some

substandard NHD reports. Property I.D. had long urged HUD to step in and

make clear its intention to regulate the industry. This agreement does

exactly that.

“Property I.D. welcomes this agreement with

HUD. Other NHD report providers will now have to try to live up to the

higher standard set by Property I.D.,” added

Gilford. The agreement also protects every NHDS company and their

reports because payment will now be collected as part of escrow, which

will require a significant change in every escrow company’s

standard procedures.

About Natural Hazard Disclosure

Since 1999, California has required disclosure of six natural hazards in

one document. These include special flood hazard areas, flooding by dam

failure, very high fire hazard severity zones, wild land fire areas,

earthquake fault zones, and seismic hazard zones. Each natural hazard

must be based on Federal and State government maps. California also

legally requires several other governmentally mapped items that are not

listed on the NHDS (industrial use zone, military ordnance zones,

Mello-Roos, special tax assessment districts, airport vicinity,

conservation commission jurisdictions). These hazards will always appear

in a Property I.D. natural hazard disclosure report.

Only one disclosure report provider, Property I.D., provides all the

Federal, State, and local disclosures in its comprehensive Natural

Hazard Disclosure Report. Depending upon the location of the property,

local disclosures may include naturally occurring asbestos, methane gas,

subsidence, compressible soils, expansive soils, ground displacement,

fault rupture zones, fire threat zones, local fire hazard zones,

protected species and habitats, abandoned mining operations, local

faults, local landslides, local liquefaction zones, among others.

About Property I.D.

Property I.D. is the largest natural and environmental hazard disclosure

company in the country. By developing its own and the most complete and

accurate Geographic Information Systems, Property I.D. is able to

pinpoint the proximity of officially mapped Federal, State and local

hazards to commercial and residential real property. Using smart and

effective solutions to meet the ever-growing disclosure needs of its

clients, Property I.D. provides the most comprehensive, accurate and

best-insured disclosure report available anywhere. Property I.D.’s

dedication to its reports and its clients has created a level of

continued growth and innovation that remains unrivaled in its industry.

Visit www.propertyid.com.

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