HUD chief promises to seek industry input on RESPA reform
April 25, 2005
Tells MBA it 'makes sense' to delineate mortgage markets
HUD Secretary Alphonso Jackson
Calling again for rigorous oversight of mortgage giants Fannie Mae and Freddie Mac, the head of HUD this week also promised members of a national mortgage banking association to seek their input on reform of the Real Estate Settlement Procedures Act.
Speaking at the Mortgage Bankers Association national policy conference Tuesday, Alphonso Jackson, U.S. Housing and Urban Development secretary, said it "makes sense" to distinguish between the primary and secondary mortgage markets in any bill to tighten oversight of the government-sponsored enterprises, or GSEs.
Congress is currently being urged to more tightly regulate the GSEs. House Financial Services Committee Chairman Michael G. Oxley, R-Ohio, has pledged to work toward a legislative reform for Fannie Mae. Oxley has said that it is necessary to build a stronger regulator for the GSE. The calls for reform came in the wake of accounting scandals at Fannie Mae.
The MBA is advocating for a provision that allows the new regulator to define the boundary between the primary and secondary mortgage markets. Jackson said he agrees with the idea.
"It would prevent the GSEs from crossing into territory that is inconsistent with their charter purposes," Jackson said. "For example, HUD recently had to order Fannie Mae to stop its third-party Real Estate Owned management and servicing activities, because this is clearly a primary market activity."
Distinguishing between the two markets is referred to as the "bright line provision."
Jackson reaffirmed his commitment to reform of the Real Estate Settlement Procedures Act, or RESPA. He said he would meet with member of Congress to outline RESPA strategy, and then begin meetings with industry and consumer groups.
"I won't mention consensus because every time I do so, I get misquoted," Jackson said. "Let me just say that I look forward to hearing more from you as this process moves forward."
Copyright 2005 Inman News