HUD Kills RESPA Reform -- For Now

In a surprise move early on Monday, the Department of Housing and Urban Development withdrew a final rule that would simplify the mortgage closing process by revamping the Real Estate Settlement Procedures Act.Even though HUD Acting Secretary Alphonso Jackson promised he would re-propose the rule at some point, industry lobbyists following the issue say RESPA reform is more or less dead for now. "I think the big losers are the large lenders that wanted to control the mortgage process by bundling," said one attorney. "The winners are the title groups, brokers, and smaller mortgage bankers." In a letter to the Office of Management and Budget, Secretary Jackson said, "I have heard from a number of members of Congress, on a bipartisan basis, who voiced concerns about not receiving the benefit of a full briefing of the RESPA rule before HUD sent it to OMB." HUD has been working on RESPA reform for at least two years. The agency sent a final rule to the OMB late last year. The OMB has been studying the rule since then, and recently asked for an extension on its review period.