Industry Implores HUD to Delay RESPA

Mortgage industry groups are warning Department of Housing and Urban Department officials that they have to postpone the Jan. 1 effective date of a new Real Estate Settlement Procedures Act rule to avoid a compliance train wreck. "Despite the best motivations of HUD and the sincerest efforts of the industry, we are headed for a mortgage market train wreck on the tracks of RESPA compliance," according to six industry groups. The American Bankers Association, American Escrow Association, American Financial Services Association, Consumer Mortgage Coalition, Housing Policy Council and Mortgage Bankers Association contend that there is not enough time left to implement the new RESPA disclosure regime by yearend. "HUD has not provided clear and needed guidance on a timely basis to enable the industry to be fully RESPA-compliant by the first of the year," the Oct. 12 letter says. A spokesman said HUD secretary Shaun Donovan just received the letter and declined to comment at this time.