REALTORS® Say RESPA Reform Too Confusing and Overly Expansive
The U.S. Department of Housing and Urban Development's proposed Real Estate Settlement Procedures Act reform "tips the balance in favor of the largest financial industry players, opens the door to legal challenges, and does little if anything to benefit consumers," according to the National Assn. of REALTORS®.
“NAR appreciates the House of Representatives’ request to HUD to extend the comment period for 60 days, but HUD only granted 30 days. This reform, and getting it right, is too important to try to push it through without full consideration,” REALTOR® Adam D. Cockey Jr., chair of NAR’s Real Estate Services Forum, told the House Committee on Small Business. “We would like to see HUD withdraw its RESPA proposal, refocus it and republish.”
Reform should focus on reformatting the Good Faith Estimate (GFE) and HUD-1 for clearer disclosures that help borrowers better understand and compare mortgage products and closing costs. “We believe it is in the best interests of home buyers to have just one set of simplified rules and disclosures. The current proposal will require expensive and time-consuming changes to the industry at a time when the industry and consumers can least deal with controversial wholesale changes,” Cockey said.
NAR opposes the current rule, which is too complex, and requests its withdrawal. NAR recommends reissuing the rule with narrowly focused disclosure changes that are consistent with the consensus developed during HUD’s seven roundtables in 2005.
In a recent memo on new regulation, White House Chief of Staff Josh Bolton quoted President George W. Bush in saying “the American people deserve ‘a regulatory system that protects and improves their health, safety, environment, secures rights, and ensures a fair and competitive economic system, while respecting their prerogative to make their own decisions and not imposing unnecessary costs.’”
“The RESPA proposal fails this test, limiting choice and competition and imposing costs and confusion on consumers and industry,” Cockey said.
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