HUD’s Draft RESPA Rule Proposes Major Changes
.gif)
HUD recently proposed a major change to the regulations that implement the Real Estate Settlement Procedures Act of 1974 (RESPA). Comments on the proposed rule must be submitted by May 13, 2008. HUD will then decide whether to issue a final rule.
If adopted, the proposed changes would have a dramatic effect on the real estate closing process. The proposed rule would require:
• Lenders to disclose yield spread premiums;
• A substantially expanded Good Faith Estimate form;
• The grouping of closing costs on the GFE and HUD-1 into broad categories (e.g., Title Charges) rather than individual itemization; and
• The use of a “closing” script to be read to borrowers.
The proposed rule would specifically authorize “certain pricing mechanisms that benefit consumers, including average cost pricing and discounts, including volume-based discounts.” This is HUD’s latest effort to force the packaging of closing services.
While the proposal is controversial and is not likely to be promulgated as proposed, it does command our attention. CATIC will offer comments on the proposed rule, which we will share with you. This Broadcast Fax has been posted to our web site (www.CaticAccess.com) with a link to the proposed rule. You may submit a comment to HUD by following the procedure outlined on the first page of the proposed rule.
If you have any questions or would like additional information, please contact our Legislative and Regulatory Counsel, Rich Hogan, in our Rocky Hill office.
©2008 Vermont Attorneys Title Corporation. All rights reserved.
