RESPA changes pulled
March 22, 2004
More comments needed from industry, consumer groups, HUD chief says
The U.S. Department of Housing and Urban Development has withdrawn its proposal for changes to the Federal Real Estate Settlement Procedures Act and plans to review public and industry comments before resubmitting the rule, acting HUD Secretary Alphonso Jackson announced Monday morning.
"I believe that it would be prudent for HUD to reexamine the RESPA rule before it is made final," Jackson said. "I plan to revise the rule, if necessary, and to re-propose the rule, requesting additional comments, after I have had an opportunity to brief members of Congress and to meet with affected consumer and industry groups. After the rule has been completely vetted, I will send it back to OMB for review."
Jackson would not give a timetable for the new process.
HUD submitted its RESPA proposal to the White House Office of Management and Budget for its review in December 2003, nearly a year and a half after the department first proposed it. But HUD kept secret what exactly it sent to OMB, so know one knew whether it was the same as the original proposal or incorporated changes.
The original proposal netted an unprecedented 45,000 comments during the public comment portion in 2002. Many of those came from within the real estate industry in opposition to the changes.
The original proposal would have changed the disclosure requirements for mortgage broker fees, including the controversial yield spread premiums, simplify the good faith estimate form and permit the sale of guaranteed-price bundled packages of mortgages and mortgage-related services.
Jackson would not discuss the proposal sent to OMB, saying, "We're limited to what we can say about the substance of rule." He said OMB's comments, along with concerns of industry and consumer groups and members of Congress, factored into his decision to pull the rule and review it again.
He said he intends to re-propose the rule after getting comments from those groups. The original rule spurred thousands of comments, but those were from the rule proposed two years ago, Jackson said.
He said the common thread he heard from all groups was a concern they hadn't had a chance to see the rule before it was sent to OMB.
Jackson said HUD is still committed to revising RESPA.
Copyright: Inman News Features