RESPA Builder Reprieve

The Department of Housing and Urban Development wants to reconsider a new Real Estate Settlement Procedures Act provision that prohibits builders from offering homebuyers discounts and upgrades that are tied to the use of the builder's affiliated mortgage and title companies. "HUD will delay the planned implementation of RESPA's 'required use' provision for 90 days, or until July 16, as it solicits public comment on whether to withdraw its new definition that would have taken effect in January," the department said. The Bush administration postponed the effective date of the RESPA provision from January 16 to April 16 after the National Association of Home Builders sued HUD to block implementation of the required use provision. A U.S district court is scheduled to hear arguments on the controversial RESPA provision April 3. NAHB declined to comment on HUD's latest move. "This is welcome news to home builders and their affiliated companies, which now have more time to continue business as usual under existing RESPA requirements," said RESPA attorney Phillip Schulman.