ALTA Alert: HUD Releases RESPA Guidance
|August 13, 2009|
The U.S. Department of Housing and Urban Affairs (HUD) on Aug. 13 issued some long-awaited guidance on portions of the Final RESPA Rule yet to be implemented in a 16-page
“New RESPA Rule FAQs.”
Beginning Jan. 1, 2010, HUD will require loan originators to provide borrowers with a standard Good Faith Estimate that clearly discloses key loan terms and closing costs and that closing agents provide borrowers with a new HUD-1 settlement statement. New RESPA regulations were published Nov. 17, 2008. Portions of the Rule went into effect Jan. 16, 2009.
The FAQs were comprised from industry questions and have been provided to facilitate implementation of the new requirements, HUD said. According to HUD, this is a majority of the guidance, and expects to release further details in the near future.
While many groups have been pushing for a delay in the implementation, Dan Wold, chairman of ALTA’s RESPA Implementation Taskforce, urged membership to take the necessary steps to be compliant with the new RESPA rule by or before Jan. 1, 2010, because there’s no certainty a delay will occur.
“The industry has been anxiously awaiting HUD’s response to our questions," said Mary Schuster, director of operations for RamQuest Software. "We’re pleased to see the answers and to see that HUD is providing clarification on questions from not only the title industry but also the lending and settlement communities. We are looking forward to integrating this information into our ongoing implementation process.”
Schuster also is a member of the American Land Title Association's RESPA Implementation Taskforce, which was formed earlier this year to analyze and interpret corresponding sections of the rule. The taskforce also helped convey all of the ALTA members’ questions and concerns regarding the rule.
HUD’s release of the guidance came the same day ALTA sent a letter telling Ivy Jackson, HUD’s director, that the industry was in need of interpretation and guidance on many issues related to HUD’s new RESPA Rule. This was a follow-up to a letter sent June 12.
“As you can imagine, time will be needed in order to update software, integrate systems, train title industry professionals, and establish protocols and best industry practices in order to comply with the new Rule,” the letter said. “While the industry continues to move ahead with implementation plans, these outstanding issues must be resolved in order to fully implement the Rule. With the final deadline of January 1, 2010 for the new GFE and HUD-1/1A forms, the industry is mindful of the fact that only a few months remain and yet a number of key issues are still pending guidance from HUD.”
The letter continued: “As time is of the essence, ALTA’s RESPA Implementation Task Force is requesting a written response to its initial inquiry as well as the attached as quickly as possible. This guidance is critical to ensure a smooth transition with the new forms and implementation of the Rule.”
Contact Jeremy Yohe with questions or comments.