MBA Issues Formal Comments On HUD's RESPA Proposal

The Mortgage Bankers Association (MBA) has released its formal comments in response to the Department of Housing and Urban Development's (HUD) proposed rule to amend Regulation X, its Real Estate Settlement Procedures Act (RESPA) regulations. In the letter, MBA President and CEO Jonathan L. Kempner urged HUD to coordinate its RESPA reform efforts with the Federal Reserve's work to improve clarity about the terms and cost of credit under the Truth in Lending Act (TILA)."MBA applauds HUD's RESPA reform efforts and believes RESPA reform has the potential to greatly improve disclosures to consumers concerning their closing costs," says Kempner. "Recent events demonstrate that borrowers also need additional clarity about the terms and cost of credit, which falls under the Fed's responsibility under TILA. For that reason, we strongly believe that HUD should link its efforts with the Board of Governors of the Federal Reserve so that both agencies work together in a careful, coordinated and comprehensive manner to truly simplify and improve the mortgage process for consumers."Specifically, MBA's comments call on HUD and the Fed to work together to produce a combined TILA and Good Faith Estimate (GFE) form and implement it at the same time to replace the current RESPA and TILA disclosures that are provided to borrowers at the time of application. MBA and its members have developed a proposed combined form, as well as a comparable revised HUD-1, which MBA included with its comment letter.In its letter, MBA also states that it would support complementary statutory changes that would truly simplify and improve the mortgage process.

Source: Mortgage Bankers Association