Trade Groups Urge HUD to Pull RESPA Rule

Industry groups are backing an Obama administration plan to simplify mortgage disclosures and make them more consumer friendly but first the trades want the Department of Housing and Urban Development to kill a Real Estate Settlement Procedures Act rule that is due to go into effect Jan. 1, 2010. The administration has endorsed the concept of merging the RESPA disclosures and the Federal Reserve Board's Truth in Lending Act disclosures into a single document as part of its legislative proposal to reform the regulatory system. "We believe development of a simple, single RESPA/TILA disclosure is achievable, and that such an effort can be undertaken and completed far sooner than broader legislative efforts to reform regulation of the financial industry," the industry groups say in a July 1 letter to top administration officials. To move this process along, the RESPA rule should be withdrawn and HUD and the Fed should commence a joint rulemaking effort, according to the letter, which was signed by 10 associations. Signers include: American Bankers Association, American Escrow Association, American Financial Services Association, Consumer Bankers Association, Consumer Mortgage Coalition, Housing Policy Council of the Financial Services Roundtable, Independent Community Bankers of America, Mortgage Bankers Association, National Association of Mortgage Brokers and Real Estate Settlement Providers Council.