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cution and purchasers would still have legal remedies for unlawful conduct.

In conclusion, I would like to express again my concern to the subcommittee that the administration's land sales proposals have been deleted from the HUD bill. We feel that our recommendation to raise the threshold of the act from 50 to 100 lots in conjunction with our proposal of new regulatory exemptions will meet the concerns of both the industry and the Congress with respect to the small developer.

In our regulatory proposals, the Department places utmost importance on the character of the subdivision and identifying those circumstances where consumers are adequately protected or where registration would be an unneeded burden on the developer.

We extend our availability and willingness to work with the committee to assist in preparing legislation that meets both the needs of the consumers and developers and the concerns of the Congress.

At this time, we would be pleased to answer any of your questions.

[Ms. Worthy's prepared statement, on behalf of the Office of Interstate Land Sales Registration, appears along with the following table submitted by the Office entitled "Statement of Record Filings":]

STATEMENT OF

PATRICIA M. WORTHY

ADMINISTRATOR

OFFICE OF INTERSTATE LAND SALES REGISTRATION

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

BEFORE THE

SUBCOMMITTEE ON HOUSING

HOUSE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS

AUGUST 3, 1978

Mr. Chairman

It is with great pleasure that we appear before this

committee to discuss with you various legislative proposals to

amend the Interstate Land Sales Full Disclosure Act.

Bills have

been introduced by Congressman Minish, the Administration and

Senator Nelson, the latter being incorporated into s. 3084

which passed the full Senate.

The Interstate Land Sales Full Disclosure Act took effect

a little over nine years ago.

The Act was new; precedent was

lacking; staff was inexperienced in its new discipline;

aspirations as to breaking ground were high; enthusiasm in the

relatively new concept of "consumer protection" was spirited, and

the desire to execute the Congressional mandate was clearly

evident.

After nine years of operating the program, we are able

to see clearly what has been its strengths and its weaknesses. Experience has been profitable, and improvements have in some

measure been due to trial and error.

In administering the Act, we have been effective in carrying out the Congressional objectives of providing full disclosure to lot purchasers. There have been over 8,600 filings

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with the Department covering over 5,250,000 lots in subdivisions.

Purchasers and potential purchasers have had the benefit of a
property report fully informing them about the subdivision in

which they bought or considered buying a lot.

The Department has also been active in serving as an

intermediary between purchasers and developers in helping resolve thousands of consumer complaints. In the last year alone,

HUD has reached settlements with developers in which refunds
have been offered to purchasers from contract obligations
amounting to approximately $133,500,000. Further, HUD has

successfully used its statutory authority to pursue a number of

flagrant violators with civil and criminal action, obtaining
91 indictments against individuals and companies and initiating
26 injunction cases against 54 companies and 82 individuals.
The Department also has instituted several hundred administrative

proceedings against developers who have omitted facts or made

misleading statements in their filings. These actions help to

ensure that purchasers get full and accurate disclosures.

The Office of Interstate Land Sales Registration (OILSR) staff members have been keenly aware that in the enforcement of the Act's provisions and requirements, competing interests of the regulated industry and the purchasing public have had to be

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In considering additional legislative changes we will give our views and state our preferences concerning proposals in the Senate and the Minish bills and we will offer our reasons

why we fully support the legislative changes proposed by the Administration.

We believe that enactment of the Administration program

together with the Regulations recently proposed, will result in

overall balanced improvement in the administration and in the furtherance of the goal of protecting the interests of purchasers. At the same time, we believe that the legitimate interests of

land developers will be enhanced.

DISCUSSION OF ADMINISTRATION AND MINISH PROPOSALS

Like many of the members of Congress, the Department

recognizes the problems of small developers in complying with

the registration requirements of the Act.

50-LOT THRESHOLD

The 50-lot threshold in the Act is very low, technically subjecting to jurisdiction many people whose entry into the land sales business is minor or only temporary and who have no

conception that Federal law might apply to them.

From a survey of non-registered, non-exempt subdivisions,

we learned that over half contain fewer than 100 lots.

Moreover,

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