WASHINGTON – There's still no official word yet from the U.S. Department of Housing and Urban Development on when the federal agency will release its final rule that amends the Real Estate Settlement Procedures Act (RESPA). But given that the clock is ticking and there have been indications that an announcement may be imminent, CUNA Assistant General Counsel Jeffrey Bloch is encouraged that HUD has urged him and other credit union representatives to meet with agency officials to discuss the association's position on HUD's proposal. Bloch plans to meet with HUD's John Weicher, assistant secretary, Housing/Federal Housing Commissioner on September 8. At press time, Bloch said he had just received the go-ahead from HUD, and he had not finalized a list of credit union representatives who will join him at the meeting. But Bloch said they would include people who have been "vocal" on the issue. As CUNA stated in its Oct. 28th comment letter to HUD, CUNA recognizes and supports the premise of HUD's proposal – "to simplify and improve the process of obtaining a mortgage, as well as to reduce settlement costs for consumers." However, wrote CUNA, "we believe that this proposal will be unduly burdensome for lenders with very few corresponding benefits for consumers." Specifically, CUNA takes issue with two areas of HUD's RESPA proposal: changing the format of the Good Faith Estimate (GFE) form "to ensure that the estimates are more accurate and delivered in a more timely manner;" and allowing lenders to offer borrowers Guaranteed Mortgage Packages (GMPs) as a way "to simplify the mortgage process, promote competition to lower costs, and to facilitate the ability of borrowers to shop for a loan." Concerning the first item, Bloch said changing the format of the GFE according to HUD's proposal will actually result in a more confusing three-page form than the current one-page form. It will also add some disclosures that are already included under the Truth in Lending Act (TILA). "CUNA is all for the goal of simplifying the GFE form, but HUD's proposal doesn't achieve that," said Bloch. "The current Good Faith Estimate form doesn't need to be totally redone. HUD can take the current form and work with that." As for the GMPs, Bloch made it clear that CUNA "is not against lowering mortgage costs for consumers, but the proposed GMP would allow large banks to negotiate discount pricing deals with settlement companies that could result in larger banks crowding out small lenders such as credit unions and place smaller lenders at a competitive disadvantage to larger banks." Bloch said when he contacted HUD for the meeting that agency officials were eager to meet with him and other credit union officials and they "encouraged" him to meet with HUD representatives. At press time, Bloch did not have any word from HUD on when the agency intends to announce its final rule. However he said he's heard the announcement will be made "soon," and he said when he contacted HUD to set up the appointment, they indicated to him that if he waited until after Sept. 8, "it might be too late." -

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