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First Houston announces Cascade Mortgage as new affiliate

National Mortgage Professional
Jun 23, 2008

MBA issues formal comments on HUD's RESPA proposalMortgagePress.comMBA, RESPA, comment lettters, RESPA proposal, TILA, The Mortgage Bankers Association has released its formal comments in response to the Department of Housing and Urban Development's (HUD's) proposed rule to amend Regulation X, its Real Estate Settlement Procedures Act (RESPA) regulations. In the letter, MBA's President and CEO Jonathan L. Kempner urged HUD to coordinate its RESPA reform efforts with the Federal Reserve's work to improve clarity about the terms and cost of credit under the Truth in Lending Act (TILA). "MBA applauds HUD's RESPA reform efforts and believes RESPA reform has the potential to greatly improve disclosures to consumers concerning their closing costs," said Kempner. "Recent events demonstrate that borrowers also need additional clarity about the terms and cost of credit,which falls under the Fed's responsibility under TILA. For that reason, we strongly believe that HUD should link its efforts with the Board of Governors of the Federal Reserve so that both agencies work together in a careful, coordinated and comprehensive manner to truly simplify and improve the mortgage process for consumers." Specifically, MBA's comments call on HUD and the Fed to work together to produce a combined TILA and Good Faith Estimate (GFE) form and implement it at the same time to replace the current RESPA and TILA disclosures that are provided to borrowers at the time of application. MBA and its members have developed a proposed combined form, as well as a comparable revised HUD-1, which MBA included with its comment letter. In the event that HUD decides to move forward to finalize the rule without the Fed, MBA proposes HUD do the following: • Pare back its proposal and forms to address only closing cost issues (consistent with its statutory authority); • Make the form given at the time of loan application and the HUD-1 more consistent so borrowers can easily compare their costs; • More clearly disclose both lender fees and mortgage broker fees on the GFE and HUD-1; • Revise the tolerances contained in the proposal with bright line safe harbors to reduce surprise charges at settlement; • Eliminate the "closing script" which HUD says would add 45 minutes to each closing; • Allow lenders and brokers to use "average cost pricing"; • Also allow "volume discounts" without the restrictions proposed so borrowers can realize the maximum benefit of such arrangements; • In its letter, MBA also states that it would support complementary statutory changes that would truly simplify and improve the mortgage process. A copy of MBA's comment letter, including its proposed revised GFE and HUD-1 forms, can be found by clicking here.
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