Lender Groups Not United on RESPA

Two associations representing the largest mortgage lenders are sending different signals on how the Bush administration should proceed with its proposal to simplify the mortgage process and reduce the cost of settlement services.The Financial Services Roundtable is urging the Department of Housing and Urban Development to re-issue a proposal to revamp its Real Estate Settlement Procedures Act regulations so industry groups can review it and comment before it is finalized. "The complexity of housing finance and the entrenched practices based on outmoded rules, make it imperative that HUD not assume the risk of adopting a final rule that will not achieve the benefits we both seek," FSR president Steve Bartlett says in a letter to HUD Secretary Mel Martinez. Meanwhile, the Consumer Mortgage Coalition is urging the Office of Management and Budget to make sure a final RESPA rule is workable and allows lenders to bundle mortgage and settlement services in a single package. The OMB has to sign off on the RESPA rule before HUD can issue it. A final rule should not allow a two-package approach "even as an option" and should not allow real estate agents to subpackage or receive referral fees, CMC executive director Anne Canfield says in a letter to the OMB. "We understand that singling out real estate agents is controversial, but all should acknowledge that real estate agents have a unique position of trust and influence with homebuyers, particularly first-time homebuyers," she says.