March 30, 2003

ALTA® Supports Revisions to RESPA Promoting Small Business & Empowering Consumer Choice


In July 2002, HUD issued proposed revisions to its Real Estate Settlement Procedures Act (RESPA) regulations that would fundamentally alter the way in which mortgages and real estate settlement services are marketed and priced. Comments were due October 28, 2002. The proposal would scrap the existing rules and forms for the disclosure of settlement cost estimates by lenders that have been in place for almost 30 years and substitute two radically new regimes. Under a “Revised Good Faith Estimate with a Tolerance” regime, lenders would provide binding estimates only for major categories of lender and settlement charges, with a requirement that the final charges for those categories not exceed the estimates (or exceed them only by limited tolerances). Under the second regime, lenders could provide consumers with an abbreviated disclosure, and would be given an exemption from the antikickback provisions of Section 8 of REPSA, for a “guaranteed package” consisting of a loan and all settlement services.

ALTA supports settlement services legislation or regulations that promotes small business and consumer choice, requires meaningful disclosure, and that would enhance a consumer’s ability to shop effectively for settlement services. HUD’s current packaging proposal does not achieve these goals and would have many adverse effects.

Action Requested

  • Contact the Senator’s office (ask for the Chief of Staff) and ask that he/she attend the April 8 Banking Committee hearing on RESPA. (Senate Banking Committee Members)
  • Voice your concerns with HUD’s proposed rule (see talking points below).
  • Offer to follow up with any additional information they may request.
  • Return the attached “Call Results Form [pdf] to ALTA.

Talking Points

  • Small business real estate settlement service providers should not be penalized.
  • The proposed rule would affect hundreds of thousands of businesses and millions of transactions in the real estate industry. HUD itself says that compliance will cost small business millions of man hours in time alone.
  • The strongest segment (real estate) of an otherwise weak economy should not be altered.
  • The proposed rule gives lenders too much control in the real estate transaction.
  • Consumers should be allowed to choose a service provider that will protect their interests.
  • A two-package approach in which settlement services are a separate package promotes small businesses and protects the consumer.


Contact ALTA at 202-296-3671 or

North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.