ALTA® Comments on RESPA by Kurt Pfotenhauer
May 15, 2008
WASHINGTON -- The American Land Title Association (ALTA) has filed its formal comments with the Department of Housing and Urban Development on proposed rules to amend the Real Estate Settlement Procedures Act (RESPA).
HUD recently granted a 30 day extension from May 13 to June 12 for public comment at the request of industry leaders and the 148 members of Congress who signed a letter to HUD Deputy Secretary Roy Bernardi urging the extension “given the potentially far-reaching impact of RESPA regulatory changes.”
ALTA CEO Kurt Pfotenhauer stated, “We thank Congressman Rubén Hinojosa (D-TX), Congresswoman Judy Biggert (R-IL), and the other Members of Congress for their leadership in this important rule-making process. We will use this additional time to more carefully study and prepare supplemental comments on the 600-page Regulatory Impact Analysis that accompanied the proposal.”
In its comments, ALTA expressed concern that certain provisions of the proposal are counterproductive to achieving the Department’s goal of simplifying the real estate transaction process and providing consumers with reliable and easy-to-understand information about loan terms and settlement costs to facilitate comparison shopping.
Specifically, ALTA cited:
- The imposition of responsibility on the closing agent to read and interpret the closing script on behalf of the borrowers will increase costs for both sellers and borrowers, while coming too late in the process to help consumers.
- The proposed Good Faith Estimate (“GFE”) is long and complicated and does not allow for an easy comparison to the HUD-1 Settlement Statement (“HUD-1”).
- The imposition of tolerances and volume discounts create an anti-competitive environment that could disadvantage small businesses and give consumers fewer choices of settlement service providers.
- “RESPA reform cannot be resolved in one sweeping change without considering and appreciating the many moving parts of a residential real estate transaction,” said Pfotenhauer. “We urge the Department to carefully consider the potential problems and impractical effects of its proposed rule, and stand ready to help craft a solution that both benefits consumers and does not adversely affect our members.”