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Legal IssuesHUD to ‘exercise restraint’ in new RESPA regulations
If you’re following the evolution of amendments to RESPA (Real Estate Settlement Procedures Act), you know that HUD’s responses to industry, consumer and governmental requests to delay implementing these changes has been “no dice.”
However, HUD announced Friday that for the first four months of 2010, the staff of the Mortgagee Review Board (MRB) will “exercise restraint in enforcing new regulatory requirements” that are due to take effect on January 1. This apparent change in thinking is in recognition of the challenges FHA-approved lenders are facing, and allowing some leeway for those who demonstrate that they’re making a “good faith effort” to comply with RESPA’s new requirements. HUD is also asking other federal and relevant state agencies to exercise the same 120-day restraint in enforcement for non-FHA originators and other settlement service providers who demonstrate a good faith effort to implement RESPA’s new rules.
Now, as the dawning of a new day for RESPA transactions is upon us, do we see a shift in HUD’s approach? I think we do. We may be breathing a sigh of relief but we must recognize that this not a declaration of amnesty by HUD to allow lenders and settlement service providers to selectively choose — or ignore – the new regulations.
Sensitive to the concerns that residential mortgage industry faces for implementing these changes, HUD is recommending restraint. Blatant disregard for the new regulations runs the risk of drawing the attention of this not-quite-sleeping giant. Enforcing entities are being encouraged to keep a mindful eye on those who work diligently to integrate these consumer-friendly changes into their day to day practices.
If you have questions or concerns about how these changes may affect you, your practice or your profession, contact legal counsel or PAR for more information.
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About Brett: Brett Woodburn, Esq. is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees and representing and defending real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. He routinely counsels employers on employee relations issues as one of the voices of the PAR Legal Hotline. |
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Brett,
Good post. I think we should keep in mind that the new GFE and HUD-1 are very consumer friendly, so as REALTORS(R) we will (hopefully) see an end to ‘abusive ambush fees’–those that many of us have seen literally on the day of settlement. When you read the HUD regs, the ability to get a copy of the HUD-1 in advance of settlement is upon written request, which most people don’t realize; they think it is automatic. I think every consumer should get the HUD-1 automatically at least 24 hours before settlement.