The Mortgage Bankers Association is actively seeking input from its members on three RESPA reform options as it prepares for the Department of Housing and Urban Development to issue a RESPA proposal later this year.The trade group has scheduled a July 20 town hall teleconference with members to discuss the options and gauge their members' appetite for reform of the Real Estate Settlement Procedures Act. The first option would revise the good-faith estimate disclosure that borrowers receive shortly after applying for a mortgage so that it is comparable to the HUD-1 settlement sheet at closing. The revised GFE would disclose that the lender is making a yield-spread premium payment to the mortgage broker "in a manner that would inform the borrower of such payment but not confuse the borrower and undermine competition," a summary of Option 1 says. The second and third options build on Option 1 and would permit lenders to do average cost pricing for lender fees (Option 2) and permit volume-based discounts on third-party fees (Option 3). Many large lenders want the second and third options, but settlement service providers, title companies, and real estate agents are opposed to giving lenders that kind of pricing power.
