A message from NAMB President Jim Nabors: NAMB unveils a new GFE and other initiatives at HUD roundtableJim NaborsHUD roundtables
The National Association of Mortgage Brokers has attended the
last of the HUD-sponsored Real Estate Settlement Procedures Act
roundtables in Washington, D.C. As you know, we have been diligent
in our efforts to attend and participate in all of these RESPA
events around the country. They have been critically important and
may very well set the course for RESPA reform in the near
NAMB has listened carefully to 24 hours of testimony and
commentary from more than 300 participants at the roundtables. The
participants included industry leaders, trade group
representatives, small business owners, bankers, brokers,
settlement service providers and consumer advocacy groups. We have
taken this process, and the suggestions made by HUD Secretary
Alphonso Jackson, very seriously.
The HUD secretary urged us to think constructively and to
recommend real world solutions to the problems that affect our
industry. We take very seriously our responsibility to consumers
and to the mortgage brokers of America to be a constructive part of
this process. To that end, at the last RESPA roundtable, we
presented our view of RESPA Good Faith Estimate (GFE) reform. We
presented a new proposed GFE to replace the existing GFE and the
The highlights of our proposal are as follows:
To achieve HUD's goal of simplicity
Our form is one page long, rather than the 2004 proposal that is
four pages long. We have deleted the "teeter-totter," as it is
confusing, and suggested that the shopping chart be added to the
HUD Settlement Guide Booklet.
To achieve HUD's goal of clarity
Our form looks like the HUD-1. This suggestion has been made at
each of the five previous roundtables. Our recommendation also
includes a paragraph describing the role of the originator. One of
the concerns expressed at the roundtables includes the perception
that a mortgage broker "works for the borrower to get them the best
deal" in the marketplace. While we disagree with this perception,
we think it reasonable to disclose our relationship to the
borrower. Lenders would have to do the same thing. We have also
recommended that the yield spread premium disclosure be dropped
from the GFE form, as it adds nothing to the clarity of the
transaction or the consumer's capability to shop.
To achieve HUD's goal of transparency
Our form contemplates that HUD will require re-disclosure before
funding if the settlement costs proposed at funding are 10 percent
higher than estimated. Any change of interest rate or program would
also require re-disclosure. We have added certain elements that are
now on the HUD-1 Settlement Statement, as well.
To achieve HUD's goal of greater certainty of
Our proposal recommends that HUD issue guidelines that allow
consumers a private legal cause of action against the originator in
the event that no re-disclosure is made.
Our proposed GFE form is available for your review on the NAMB
Web site, www.namb.org. If you
have comments or concerns, please feel free to contact Legislative
Chair Joe Falk at email@example.com.
It is our hope that this form will be the template for future
discussions with HUD on GFE reform. While not a perfect document,
it goes a long way toward achieving simplicity, clarity,
transparency and a greater certainty of costs for the consumer.
We pledge to continue strong leadership in this effort and to
always represent the best interests of mortgage brokers all across
Thank you for your support.
Jim Nabors, President
National Association of Mortgage Brokers