Proposed RESPA Reform
June 2008

HUD recently proposed amending RESPA in an attempt to simplify and improve the process of obtaining mortgages and reduce consumer settlement costs. The public comment period has closed. MAMP would like to thank those that responded to our call to action.

This Proposal would have a significant negative impact on Mortgage Brokers. Among other things, the proposed rule would revise and standardize the Good Faith Estimate, modify the HUD-1 Uniform Settlement Statement, impose additional disclosure requirements, require recitation of a "closing script" to borrowers, and clarify instructions as to how applicable forms are to be completed.

The proposed HUD Rule makes distinctions among mortgage originators with no basis for doing so, and in disregard of market realities. HUD has taken this position even though exhaustive studies of mortgage disclosures by the Federal Trade Commission show that additional disclosures of mortgage broker compensation created confusion, caused consumers to choose more expensive loans, led to a bias against broker-assisted transactions, and impeded competition, thus hurting consumers.

The lobbyists for the National Association of Mortgage Brokers are working on this issue. We will keep you informed of any new developments. If you have any questions please contact MAMP@assnhqtrs.com.