Comment Call: Proposed RESPA Rule

CUNA
April 14, 2008 | COMMENTS

The Department of Housing and Urban Development (HUD) has issued a proposed rule to amend the requirements under the Real Estate Settlement Procedures Act (RESPA) in order to improve the mortgage process and to lower settlement costs for borrowers.

The proposed rule will make significant changes to the Good Faith Estimate (GFE) form. The changes will result in a new format for the GFE that is intended to ensure that the estimates are more accurate and to facilitate comparisons between lenders. These changes will also facilitate comparisons between the GFE and the HUD-1 or HUD-1A settlement statements.

The proposed changes are also intended to ensure that borrowers are aware of the final loan terms and costs at settlement by reading to them a copy of a “closing script.”

The proposal will clarify when it is appropriate to provide borrowers with discounts and average price costing of settlement services. An earlier proposal in 2002 would have permitted lenders to provide a package of settlement services that would have guaranteed a lump sum price for all loan originator and government-required settlement costs associated with obtaining a mortgage, along with a guaranteed interest rate. CUNA and others strongly opposed this as it would have disadvantaged smaller lenders, and it is not included in this latest proposal.

The proposed rule also includes changes to the disclosures in connection with the lender payments to brokers that are commonly referred to as yield spread premiums.

Comments are due by May 13, 2008 . Please submit your comments to CUNA by May 2, 2008.

Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at mdunn@cuna.com and to Senior Assistant General Counsel Jeffrey Bloch at jbloch@cuna.com ; or mail them to Mary and Jeff in c/o CUNA's Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601. You may also contact us at 800-356-9655, ext. 6032, if you would like a copy of the rule, or you may access them on the Internet here.

> View the complete comment call on CUNA's website