HUD "Receptive" to CU Comments on RESPA Proposed Rules
WASHINGTON - Credit union officials took their case to the U.S. Department of Housing and Urban Development Sept. 8 on the agency's proposed amendments to the Real Estate Settlement Procedures Act (RESPA) and came away from the meeting concurring that HUD was "receptive" to their comments and concerns about the...
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WASHINGTON – Credit union officials took their case to the U.S. Department of Housing and Urban Development Sept. 8 on the agency’s proposed amendments to the Real Estate Settlement Procedures Act (RESPA) and came away from the meeting concurring that HUD was “receptive” to their comments and concerns about the proposed changes. Representing credit unions at the meeting with HUD Assistant Secretary for Housing John Weicher and General Counsel-Designate Richard Hauser were Jeff Bloch, assistant general counsel for CUNA ; and Eric Envall, regulatory compliance counsel, NAFCU; Lonny Maurer, CEO, Belco Community CU; Rick Wargo, SVP/general counsel for the Pennsylvania Credit Union Association. Representatives from American Airlines FCU, Navy FCU, North Carolina State Employees CU, and CUNA Mutual Mortgage also attended the meeting, as did several other members of the HUD staff. Bloch said the attendance at the meeting by the HUD staff “indicated the agency is interested in what credit unions have to say on the proposed amendment.” Credit unions’ concerns focus on the amendments’ proposed guaranteed mortgage package and the proposed changes to the good faith estimate. NAFCU and CUNA have both expressed their reservations with each of the proposals in their respective comment letters, which were two of the more than 40,000 HUD said it received on the proposed RESPA changes. A guaranteed mortgage package would allow a lender to bundle real estate settlement services and disclose the costs under the rate. Envall said credit unions are concerned that the use of GMP will “significantly disadvantage” larger lenders that “already have a major foothold” in the mortgage market and are in the best position to negotiate discount deals with settlement companies and guarantee prices because they have economies of scale. In addition, offered Bloch, since it would be difficult for credit unions to offer GMPs, CUs would probably not be able to serve certain markets such as low-income communities. So the GMPs would actually wind up harming consumers rather than benefiting them, as the amendments are intended to do. On the issue of the Good Faith Estimate form, credit union representatives reiterated their concerns that the proposed changes to the form would result in lengthening the current one-page form to three pages and would not necessarily help consumers compare mortgage products. Credit union officials came away from the meeting agreeing the time was “well spent,” even though they were not given any indication when HUD plans release the final rule. “They were tight-lipped about the release date,” said Bloch. “They’re still deliberating and debating it internally.” HUD’s Weicher did let the credit union delegation know that the final rule will differ from the proposed rule because of the volume of comment letters the agency has received. -
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