"Government Made Easy" Yeah Right! (aka HUD's New RESPA Proposal)
By David Dickinson
Last Friday (March 14, 2008), HUD announced a major proposal to change RESPA. Rather than reading the proposal in detail, our friends at BankersOnline (BOL) have provided a great summary. If you are a glutton for punishment, you can read the entire proposal (all 96 pages) and even more at HUD's website.
HUD reports "HUD has proposed changes to RESPA which provide more complete, accurate and understandable information about their mortgages. These changes will also help borrowers shop for the best loan." You can read more from HUD's side of the story at their website.
I normally don't take time to read proposals. Many times they don't end up the way they started or they get repealed. I've always joked that I can only fit so much into my brain. If I put something in, something has to come out. So if I read a proposal, something important comes out.
However, I think I'll be spending some time reading this one. Why? Because we ALL need to write a comment letter concerning this proposal. A quick look at this proposal tells me things are way out of hand. HUD reports in the Federal Register the Good Faith Estimate will cost $44.40 per loan, on average. They go on to tell us the HUD-1/1A Settlement Statement will cost an additional $54.08 per loan. That's nearly $100 PER LOAN once you have the new regulation implemented. They also estimate:
- one time expenses to implement these changes (training, software upgrades, etc.) will cost our industry $570,000,000 and
- reoccurring costs for RESPA compliance to be $1,231,000,000.
Now do I have your attention? BOL provides even more cost information in a separate report. You have until May 13, 2008 to write your comment letters. I suggest you start sharpening your pencils. Alternatively, you can email your comments by clicking here:
