House Panel Wants HUD to Kill RESPA Rule

The mortgage reform bill approved by the House Financial Services Committee directs the Department of Housing and Urban Development to withdraw the Real Estate Settlement Procedures Act rule that was issued by the previous administration shortly after the November elections. The committee approved an amendment by Rep. Judy Biggert, R-Ill., that directs HUD to work with the Federal Reserve Board in issuing mortgage disclosures that are "complementary" and don't confuse consumers that are applying for a mortgage. HUD is responsible for designing mortgage disclosures under RESPA and the Fed has similar responsibilities under the Truth in Lending Act. Ideally lenders would like to see a single RESPA/TILA disclosure. Nine industry groups backed the Biggert amendment. Meanwhile, the committee narrowly defeated an amendment by Rep. Gary Miller, R- Calif., to postpone for 12 months the implementation of the Home Valuation Code of Conduct. HVCC affects appraisals on all loans sold to Fannie Mae and Freddie Mac. Starting May 1, lenders must comply with HVCC that the government-sponsored enterprises agreed to implement as part of a settlement with New York Attorney General Andrew Cuomo.