New RESPA Rule to Come by Year's End

HUD Official Says Changes to Be in Place by 2009

WASHINGTON, DC -- (MARKET WIRE) -- 04/02/08 -- HUD intends to publish a final Real Estate Settlement Act (RESPA) rule by year's end and to implement it by late 2009, HUD Deputy Assistant Secretary for Regulatory Affairs Gary M. Cunningham told an audience of real estate broker-owners, real estate franchisers, mortgage lenders, title insurers and agencies, home builders, home service and settlement service providers at the Real Estate Services Providers Council (RESPRO(R)) annual convention at the Mandarin Oriental Hotel on Wednesday.

HUD's RESPA proposal, which was published in the Federal Register on March 14, is undergoing public comment through May 13. RESPRO(R) members queried Cunningham about how burdensome a new HUD-1 form, Good Faith Estimate and a mandatory script to be read aloud at settlement could be. He denied the settlement script merely repeats a home loan's costs. However, attendees expressed their concern that the script could substantially lengthen settlements, forcing title companies to increase costs when completing fewer transactions each day.

"I'm a little surprised when I hear 'This is massive and unheard of and undreamed of. Where did HUD get all this stuff?'" Cunningham said. "We're trying to make the system work better."

Defending the 94-page proposal as short by federal standards, Cunningham said HUD will also ask Congress for penalties to enforce RESPA. "We're trying to use the closing as 'Before you get to the dotted line,'" Cunningham said.

HUD isn't intending to target affiliated businesses, Cunningham said, in response to questions over the rule's new restrictions on consumer incentives for using a builder's or real estate broker's affiliated mortgage or title business.

"From HUD's perspective... affiliated businesses are recognized as legitimate," Cunningham said. "We're not trying to overturn that or change that. We are trying to deal with this one specific problem [RESPA reform]."

About RESPRO(R)

Real Estate Services Providers Council, Inc. is a national, non-profit trade association of real estate broker-owners, real estate franchisers, mortgage lenders, title insurers and agencies, home builders, home service and settlement service providers united to deliver convenient, innovative and cost-efficient services to consumers through strategic alliances across the home buying industry. For more information about RESPRO(R), see www.respro.org.

CONTACT: Sue Johnson (202) 862-2051, ext. 210 sjohnson@respro.org

2008-04-02 17:29:03 0326892 MARKETWIRE