Race almost over for RESPA reform
October 22, 2002
HUD secretary says mortgage brokers not being 'singled out'
Inman News Features
The U.S. Department of Housing and Urban Development is "reaching the finish line" in its effort to revamp the mortgage origination process, according to HUD Secretary Mel Martinez, who said as much in a speech he delivered this morning in Chicago at the Mortgage Bankers Association of America's annual convention.
Martinez in his speech characterized HUD's planned overhaul of the regulations related to the Real Estate Settlement Procedures Act as one of the "major ways" in which the Bush Administration "is working to increase minority homeownership." He called RESPA an "outdated and complicated law," mortgage finance "a complicated industry" and the mortgage process "a mystery" for first-time borrowers.
"This Administration is working to remove the uncertainty from the mortgage finance process and ensure that would-be homeowners and existing homeowners looking to refinance are armed with the facts. This will ultimately prevent unscrupulous lending practices and increase homeownership for those who seek it, particularly minorities," he said.
Martinez said the new rules would "addresses the inadequacies" of the existing RESPA regulations by changing the way compensation to mortgage brokers is disclosed to borrowers, improving HUD's good faith estimate settlement cost disclosure and removing regulatory barriers so that any entity would be allowed to develop and offer packages of settlement services. He said the overhaul would save home loan borrowers an average of $700 per closing and an aggregate of $8 billion each year.
HUD began seeking public comment on its proposal on July 29. The comment period will come to a close on Monday.
"It is not our intention to pick winners or losers in the economy but rather to unleash the creativity of the marketplace," the HUD secretary said.
Martinez acknowledged that many mortgage brokers have been displeased by the likely impact of HUD's proposal on their business practices. But he said the goal is to protect borrowers even at the possible expense of any particular segment of the industry.
"Despite the broad support for our proposal, I know that not everyone is happy with it. Mortgage brokers, for example, tell me they feel they are being singled out. I can tell you that no segment of the industry is being singled out. My job as HUD secretary and my sole focus in this reform effort is to protect consumers so when they purchase a home, they understand exactly what they are paying for. Under our proposed rule, consumers are protected," he said.
Copyright: Inman News Service