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ALTA® Submits Early Comments on HUD's Proposed RESPA Rule

October 14, 2002

Suggests Alternative Packaging Approach that Would Remedy Concerns Expressed About HUD Proposals

WASHINGTON -- -The American Land Title Association (ALTA) has taken the lead in becoming the first major trade association to file comments on HUD's proposed changes to the regulations implementing the Real Estate Settlement Procedures Act (RESPA).

The ALTA submission outlined the title industry's concerns about the lack of statutory authority for the sweeping changes proposed by HUD, and the potential adverse effects of the proposals on consumers, the mortgage settlement process, and small businesses in the title and settlement service industry.

"Our overriding concern with the proposed changes center around HUD's lack of statutory authority to implement and enforce the proposed changes," said James Maher, ALTA's executive vice president. "While ALTA supports settlement services legislation or regulations that promote consumer choice and empowerment, require meaningful disclosure and enhance consumer ability to shop effectively for settlement services, we believe HUD's current proposals to revise the RESPA regulations do not achieve these goals."

A summary of ALTA's comments:

  • HUD's packaging proposal is based on the premise that settlement services and providers that meet lenders' needs will also meet the needs of consumers in purchase/sale transactions. ALTA believes that the HUD proposals do not afford consumers the information and freedom to choose services and providers that protect their interests in such transactions.
  • Widespread adoption of the HUD packaging regime would mean that settlement service providers would have access to the consumer only through lenders, which would have an adverse effect on the entire industry, but particularly on small businesses who have always constituted a large and very important segment of the industry.
  • A significant part of the ALTA submission discussed the Association's belief that HUD's reform objectives could be achieved without these consumer and competitive problems if packages for loan and loan-related services at a guaranteed single price were offered by lenders, and separate packages of non-lender-related settlement services, such as title and closing-related charges, and government charges, could be offered at a guaranteed single price by anyone, including title companies, realtors, and lenders.

"Such an approach would be far more competitive and would enable the market to tailor settlement service packages to practices in the various regions of the country that would better meet the needs of purchasers and sellers of residential real estate," Maher said.

To read ALTA's full comments, visit the ALTA Web site at

Source: American Land Title Association®

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