RESPA reform roundtables continue to garner industry interestMortgagePress.comRESPA reform
National Association of Mortgage Brokers President Jim Nabors,
Past President Joe Falk and representatives from several of NAMB's
state affiliates were among the many who have attended the U.S.
Department of Housing and Urban Development's recent RESPA reform
roundtable discussions. The roundtables were held to discuss
regulatory reforms that have been proposed for the Real Estate
Settlement and Procedures Act (RESPA). The discussions included a
diverse group of interested parties, including representatives from
real estate trade associations and consumer groups. NAMB
representatives have also been in attendance at three HUD-sponsored
roundtables in Los Angeles, Chicago and Fort Worth, Texas that
discussed how small businesses could be impacted by RESPA
Attendees were asked to focus on the following topics:
†What changes, if any, should be made to HUD's Good Faith
Estimate (GFE) form to make it more helpful to consumers and the
†How should loan originator compensation be disclosed on the
†What could the impact on consumers be of a mortgage package
that includes an interest rate guarantee and a fixed price for
†How can sub-packaging be designed to maximize competition
without creating undue complexity for consumers?
†Should HOEPA loans be eligible for packaging?
†Should there be an opportunity to cure and/or provide
remedies for errors or violations of mortgage packaging or GFE
NAMB President Jim Nabors was impressed by HUD's invitation to
attend all six discussion forums, noting that nothing was close to
being finalized and that HUD appeared to be "keeping an open mind."
The first roundtable was held at HUD's offices in Washington on
July 14, 2005. It was the first opportunity for the interested
parties to view HUD's new proposed Mortgage Package Offer (MPO) and
revised GFE forms. HUD informed attendees that the MPO and GFE
forms were currently being tested by consumers and may not be
included in the new rule. Attendees were also able to compare the
original 2002 RESPA reform proposal with the 2004 proposed
Nabors and Regina Lowrie, chair-elect of the Mortgage Bankers
Association, debated the merits of disclosing yield spread premiums
(YSPs) to consumers. Nabors pointed out that to require brokers to
include YSPs as part of the settlement statement would put them at
a disadvantage to lenders, who would potentially not have to
disclose such fees. NAMB's official position is to oppose any
broker-only disclosure and to urge HUD to eliminate it from any new
While consumer groups wanted mortgage customers to have the
ability to comparison shop for a one-price closing package, many
participants in the roundtable discussions were unsure of the need
for new regulations and rule changes.
A statement released by the American Land Title Association
(ALTA) said, "ALTA believes that because of the nature and
importance of the residential real estate and mortgage finance
markets to this country, HUD should avoid sweeping changes that
would dramatically alter current practices, unless there is a clear
and demonstrable basis to believe that such change will not
seriously disrupt those markets."
The RESPA reform roundtables, this summer, stand in notable
contrast to HUD's previous stab at RESPA reform. The 2002 reform
proposal spurred tremendous opposition from NAMB, consumer groups,
industry associations and members of Congress. In the face of this
mounting opposition, HUD Secretary Alphonso Jackson was forced to
withdraw the proposal. HUD Spokesman Andrew Sullivan emphasized
that the purpose of this year's roundtable discussions was to gain
"That was then and this is now," said Sullivan. "We're starting
over with a clean slate."
For more information, visit www.namb.org and www.hud.gov.