Consumer Groups Join Anti-RESPA Rule Parade

Consumer groups have joined with housing industry groups and key congressmen in urging the Department of Housing and Urban Development not to move ahead with a final Real Estate Settlement Procedures Act rule.In a letter to HUD Secretary Mel Martinez, six consumer groups say they have several "overarching concerns" about the proposed rule and that it needs to be reissued for another public comment period. "A myriad of important details must be worked through to ensure that the rule does in fact protect consumers, instead of simply providing a shield behind which mortgage originators can hide inappropriate, unfair and illegal activities," the Dec. 3 letter says. The consumer groups maintain that: HUD's proposed guaranteed mortgage package must include a guaranteed interest rate; GMPs should be used only for prime loans, not subprime loans; and HUD should not pre-empt state consumer protections to implement its RESPA rule. The Consumer Federation of America, the Consumers Union, the International Union (UAW), the National Association of Consumer Advocates, the National Community Reinvestment Coalition, the National Consumer Law Center, and the U.S. Public Interest Research Groups signed the letter.