Legislative Changes to RESPA
Posted by mortgageforensics on April 6, 2008
Legislative Changes to RESPA
To further bolster consumer protection and to ensure uniform and consistent enforcement of RESPA, HUD intends to seek legislative changes to the Act that will complement the regulatory improvements made by the rule. Currently, RESPA does not provide HUD with enforcement mechanisms for some of the most important consumer disclosures and protections. A lack of enforcement authority and clear remedies for violations of critical sections of RESPA negatively impact consumers and diminish the effectiveness of the statute.
HUD will seek the authority to impose penalties for violations of specific sections of RESPA, including Section 4 (provision of uniform settlement statement); Section 5 (GFE and settlement costs booklet); Section 6 (loan servicing); Section 8 (prohibition against kickbacks, referral fees, and unearned fees); Section 9 (title insurance); and portions of Section 10 (regarding escrow accounts). In addition, HUD proposes the authority for the Secretary and State regulators to seek injunctive and equitable relief for violations of RESPA; require delivery of the HUD-1 to the borrower three days prior to closing; and establish a uniform statute of limitations applicable to governmental and private actions under RESPA.
To Read the full text of HUD’s proposed RESPA rule, visit HUD’s website.
Diane Cipa said
I support the RESPA reform and do hope they will get legislative relief. Predators and sham affiliated businesses have been able to operate with little fear of compliance oversight by HUD.
HUD is also seeking a 3 day pre-closing review period for the HUD-1 Settlement Statement. This lengthened pre-closing review will assist our industry in reducing predatory lending as predators often use a rushed closing as a tool to make their credit kill.