ACUMA Participates in HUD RESPA Reform Roundtable, Offers Suggestions
LAS VEGAS - The American Credit Union Mortgage Association participated in the HUD Roundtable on RESPA Reform held Aug. 25 and followed up with a letter to HUD Secretary Alphonso Jackson with its comments that specifically address HUD's Good Faith Estimate. In the association's letter to Jackson, ACUMA Chairman Robert Street, president/CEO, American First CU, and Treasurer and Regulatory Compliance Committee Chair Steve VanSickler SVP/chief lending officer, Red Rocks FCU, applauded the agency's 2004 proposed GFE that begins with "About Your GFE" section. They further stated that, "It is extremely important that all consumers are made aware of their right to receive a GFE and of what this document is purporting to show them. Any information booklet is a separate document among many other documents that consumers receive. The only sure way to make consumers aware is to make sure the "About Your GFE" section survives the final revision and remains the first thing that is seen." ACUMA recommended that several data points be added to the final page for comparison of offers, "to better demonstrate differences between programs." Among their suggestions are: * Loan Originator compensation should be displayed/disclosed on the GFE clearly and prominently to include a breakdown of the exact yield spread premium being earned by a lender together with the interest rate quoted. These forms of compensation must be clearly visible to a consumer especially when they could also be charged an origination fee or discount points or both and not be receiving any credits. * To eliminate any perceived disparative treatment of mortgage brokers, the receipt of any servicing income whether paid upfront as a servicing release premium or annually/monthly as a servicing spread, for those lenders or bankers who service loans for Fannie Mae or Freddie Mac, should also be disclosed. * Regarding HUD's proposal that anyone in the mortgage industry should be able to offer a "subpackage," HUD should not regulate packaging and allow the marketplace to evolve as long as all benefits from packaging are passed on to the consumer and there are no Section 8 exemptions given. * Any opportunity to provide remedies for errors or violations should come with a cooling-off period that would allow the consumer to comparison shop. Lenders, bankers and brokers should be held accountable for any and all violations of RESPA to include a penalty being imposed for failure to deliver required disclosures, to include the GFE, within three days of application.