HUD Delays RESPA Rule Implementation in Wake of Lawsuits

In response to a legal challenge mounted by the National Association of Home Builders, HUD today agreed to delay the implementation of the so-called “required use” provision in its recently finalized RESPA rule for 90 days. The provision, which prohibits the offering of consumer discounts or incentives that are tied to the use of a settlement service affiliate, applies only to home builders but not to settlement service providers.

HUD claims the NAHB had requested a delay in the implementation of the provision, which is slated to take effect Jan. 16, but forced the agency’s hand by filing a lawsuit seeking a temporary injunction. The National Association of Mortgage Brokers also has sued HUD over the new RESPA rule.

Lenders Balk at Taking Responsibility for Broker RESPA Disclosures

Mortgage lenders increasingly are balking at the prospect that they will need to take responsibility for the mortgage disclosures brokers make under a new Real Estate Settlement Procedures Act, or RESPA, regulatory regime. Lenders argue it’s impossible to regulate brokers who generally make RESPA-required disclosures before they decide who
they will sell a mortgage to.

Department of Housing and Urban Development officials will be responding to this and other lender RESPA complaints at an Inside Mortgage Finance-sponsored audio conference that will be held at 3 pm EST today.

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HUD to Explain RESPA Plans at Upcoming Audio Conference

The Department of Housing and Urban Development’s plans to overhaul its RESPA regulations is the focus of a major audio conference to be held by Inside Mortgage Finance next Wednesday, April 23, at 3 pm EDT.

HUD Deputy Assistant Secretary for Regulatory Affairs Gary M. Cunningham will review and explain the agency’s strategy for revamping the Good Faith Estimate and the HUD-1 Settlement Statement, as well as proposing a new closing script. RESPA legal experts Jay Varon from Foley & Lardner LLP and Phil Schulman from K&L Gates LLP will discuss the real estate and mortgage industry’s concerns with the proposed RESPA changes.

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HUD Inches Toward RESPA Complaint Web Site

The Department of Housing and Urban Development is soliciting comments for the third time in four years on a proposed Web site through which complaints regarding alleged violations of the Real Estate Settlement Procedures Act can be filed. HUD said the Web site will be used to assist in RESPA enforcement and protect consumers against unfair and illegal fees and charges, as well as abusive lending practices. After years of delays, the proposal was sent to the Office of Management and Budget for review last week.