MBA commends HUD's effort to reform RESPAMortgagePress.comMBA, HUD, RESPA, GFE, HUD-1, TILA
The Mortgage Bankers Association has responded to the Department
of Housing and Urban Development's final rule under the Real Estate
Settlement Procedures Act (RESPA), which includes new Good Faith
Estimate (GFE) and HUD-1 Settlement Statement forms.
"I want to thank Secretary Preston and Commissioner Montgomery
for their work finalizing this rule and appreciate that they
clearly listened to many stakeholder concerns with the rule as
previously proposed," said MBA's Chairman David G. Kittle, CMB.
"The rule's new estimate and settlement forms are an important step
toward developing more consumer-friendly forms that will help
borrowers better understand the loan they are getting and the fees
they are paying while making it much easier for a borrower to shop
and compare the different loans they are offered."
In comments submitted to HUD in response to the proposed rule in
March, MBA strongly recommended that HUD update the RESPA rule in
tandem with the Federal Reserve's ongoing efforts to enhance
consumer disclosures required by the Truth in Lending Act
"We are disappointed that HUD did not coordinate more closely
with the Federal Reserve as the Fed implements its own improvements
under TILA," said MBA's Chief Operating Officer John A. Courson.
"As we have said many times, these two efforts ought to be
undertaken together to ensure that the new guidelines and
disclosures actually make the loan process simpler and more
transparent for borrowers."
"We also believe that HUD should provide greater clarity
concerning the new requirements on disclosure of broker fees tied
to the interest rate selected by the borrower."
Courson noted, however, that MBA appreciates that HUD provided
one year for implementation of these changes. "MBA looks forward to
working with the new administration, HUD, the Fed, Congress,
consumer organizations and other stakeholders to improve
disclosures so that borrowers have the best and simplest tools to
navigate the home financing process."
The rule is being released today, and will become effective 60
days from when it is published in the Federal Register (expected to
be Friday). Lenders will have until Jan. 1, 2010 to implement the
new GFE and HUD-1.
For more information, visit www.mortgagebankers.org.