Press Release


Title: MBA Commends HUD's Effort to Reform RESPA
Source:   MBA
Date: 11/12/2008

WASHINGTON, D.C. (November 12, 2008) -  The Mortgage Bankers Association (MBA) responded today to the Department of Housing and Urban Development's final rule under the Real Estate Settlement Procedures Act (RESPA), which includes new Good Faith Estimate (GFE) and HUD-1 Settlement Statement forms.  
 
"I want to thank Secretary Preston and Commissioner Montgomery for their work finalizing this rule and appreciate that they clearly listened to many stakeholder concerns with the rule as previously proposed," said MBA's Chairman David G. Kittle, CMB.  "The rule's new estimate and settlement forms are an important step toward developing more consumer-friendly forms that will help borrowers better understand the loan they are getting and the fees they are paying while making it much easier for a borrower to shop and compare the different loans they are offered."
 
In comments submitted to HUD in response to the proposed rule in March, MBA strongly recommended that HUD update the RESPA rule in tandem with the Federal Reserve's ongoing efforts to enhance consumer disclosures required by the Truth in Lending Act (TILA).
 
"We are disappointed that HUD did not coordinate more closely with the Federal Reserve as the Fed implements its own improvements under TILA," said MBA's Chief Operating Officer John A. Courson.  "As we have said many times, these two efforts ought to be undertaken together to ensure that the new guidelines and disclosures actually make the loan process simpler and more transparent for borrowers."
 
"We also believe that HUD should provide greater clarity concerning the new requirements on disclosure of broker fees tied to the interest rate selected by the borrower."
 
Courson noted, however, that MBA appreciates that HUD provided one year for implementation of these changes.  "MBA looks forward to working with the new administration, HUD, the Fed, Congress, consumer organizations and other stakeholders to improve disclosures so that borrowers have the best and simplest tools to navigate the home financing process."
 
The rule is being released today, and will become effective 60 days from when it is published in the Federal Register (expected to be Friday).  Lenders will have until January 1, 2010 to implement the new GFE and HUD-1.

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:   www.mba.org.