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John A. Vella named president, COO of Aames

National Mortgage Professional
Jan 27, 2006

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 reform. 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 industry? †How should loan originator compensation be disclosed on the GFE? †What could the impact on consumers be of a mortgage package that includes an interest rate guarantee and a fixed price for settlement costs? †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 requirements? 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 changes. 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 rule. 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 industry input. "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.
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