HUD Pressing Ahead with RESPA Reform

The Department of Housing and Urban Development will issue a final rule by year-end revising the Real Estate Settlement Procedures Act, HUD secretary Steve Preston told attendees at the Mortgage Bankers Association's annual convention in San Francisco. Bankers and lenders, who have long opposed the rule, will have a year to implement it, he said. "With so many families in trouble with their mortgages because in many cases they didn't understand, our goal is to make sure it never happens again," he said. On RESPA reform, he said the "unnecessary complexity" of mortgages had contributed to the housing crisis. "We must make mortgages more understandable and the process more transparent," he said. HUD has proposed a four-page form that would require mortgage lenders and brokers to provide an estimate of closing costs, interest rates, monthly mortgage payments as well as settlement services, prepayment penalties and balloon payments.