HUD Expected to Move Forward with Bundled Services
Expectations are growing that the Department of Housing and Urban Development is going to issue a rule that would revamp the mortgage application and settlement process later this summer.
And a Washington lobbyist recently reported that HUD has sent the rule to the Office of Management and Budget for a pre-clearance review.
A HUD spokesman quickly denied the talk, stressing that "no formal transmission" had been made to OMB, which reviews all regulations for the White House before they are published in the Federal Register.
However, former HUD attorney Howard Glaser said he is confident that HUD has sent the Real Estate Settlement and Procedures Act rule to OMB for review.
"It is not uncommon for a federal agency dealing with a politically charged rule to informally transmit the rule to OMB to iron out any issues that might slow or stop its progress," he said. Mr. Glaser worked in HUD's general counsel office during the Clinton years.
Sources indicated that it would be normal for HUD officials to keep OMB up to date on their progress, since the proposal is controversial on Capitol Hill and it has generated a lot of opposition from settlement services groups.
But some doubted OMB actually has a copy of the rule.
In his memo to clients, Mr. Glaser wrote, "Although details of the rule are not yet known, we believe that it is substantially similar to the proposed rule published by HUD last October. The major change is likely to split the guaranteed mortgage package - the centerpiece of the rule - into two parts, one for origination-related items and one for settlement services."
HUD officials have been very secretive about their intentions and the momentum for RESPA reform seems to be stalling.
So RESPA reform supporters were relieved when housing secretary Mel Martinez recently announced he would not run for the U.S. Senate seat in his home state of Florida.
His decision ended several months of speculation when he said he would remain at HUD through the 2004 presidential campaign.
The Mortgage Bankers Association's top lobbyist, Kurt Pfotenhauer, noted that secretary Martinez is committed to RESPA reform. "We know RESPA will get done."
Meanwhile, the secretary's RESPA reform proposal has been the subject of several favorable newspaper articles, including an endorsement by the editorial board of The Wall Street Journal.
Several conservative groups, such as the Heritage Foundation, also have added their support to the secretary's efforts to modernize HUD's RESPA regulations.
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