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RESPA reform: HUD getting lenders onboard
December 8th, 2009 2:03 PM
 
In an effort to address industry concerns about new mortgage rules that take effect on Jan. 1, 2010, the U.S. Department of Housing and Urban Development (HUD) today announced a series of live interactive online presentations for the mortgage industry.

“We’ve been working overtime to answer questions and provide training to as many organizations as we can,” said HUD Assistant Secretary for Housing/Federal Housing Commissioner David Stevens. “On the eve of these new requirements, I want to accelerate our focus with a heavy dose of plain English and customer service to help the industry prepare.”

HUD issued its final rule to improve the mortgage settlement process on Nov. 17, 2008. While reform of the Real Estate Settlement Procedures Act (RESPA) is designed to aid consumers, the burden of compliance falls squarely on the mortgage industry.

The final major phase occurs on Jan. 1, 2010, when HUD requires lenders and mortgage brokers to provide consumers with a standardized Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. Closing agents also must also give borrowers a new HUD-1 Settlement Statement that clearly compares consumers’ final and estimated costs. The rule itself became effective Jan. 16, 2009, but it included a one-year transition period to give the mortgage industry time to incorporate the changes.

HUD expects some bumps along the way. It recently issued a note instructing its Mortgagee Review Board (MRB) to exercise restraint in enforcing RESPA’s new requirements for the first 120 days of 2010. During that time, HUD expects lenders to at least make a “good faith effort” to comply with the new RESPA rules. HUD has asked other federal and state enforcement agencies to exercise the same 120-day restraint.

© 2009 Florida Realtors®
Posted by Marcos Fullana on December 8th, 2009 2:03 PMPost a Comment (0)
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