Fate of RESPA Reform Unclear

In announcing his resignation, HUD Secretary Mel Martinez has not signaled what he is going to do with his Real Estate Settlement Procedures Act reform initiative.Housing industry groups are hoping that his resignation means RESPA reform is dead. However, rumors are flying that the Department of Housing and Urban Development is ready to issue a final rule. At the same time, some sources are saying the secretary is going to issue a re-proposal of the RESPA rule that is supposed to simplify the mortgage process and reduce settlement costs. Grant Mitchell, a private attorney and former HUD official, said he's not sure RESPA reform is dead. "It seems to me he [Martinez] has to say something," Mr. Mitchell said. "It seems to me he has got to take a position, even if it's simply that he's leaving it to his successor." Rod Alba, the Mortgage Bankers Association's RESPA expert, said the secretary has several options. "It's not as if his hands are tied," he said. Mr. Alba noted that the secretary could finalize a rule that revamps the good-faith estimate disclosure and seek another round of public comment on packaging. Washington lobbyist Howard Glaser is predicting that HUD will not issue a final rule. "This is Mel Martinez's rule, and if he didn't publish it, it's not going to get published," Mr. Glaser said.