HUD has announced a 30-day extension, to June 12, 2008, for the public to comment on the proposed new Real Estate Settlement Procedures Act (RESPA) rule. The announcement came just days before the initial comment period was set to end and on the heels of a letter HUD received signed by 149 members of Congress.

The Congressional letter referenced the extensive nature of the RESPA reform proposal and the fact that some aspects of the proposed changes had not previously been the subject of public comment. In addition, the letter stated that further analysis was needed on the proposed rule’s interaction with state and federal laws and regulations including the Federal Reserve Board’s recent proposal to amend its Truth in Lending Act regulations.

Pressure also came from NAR, which has been working with its members and industry partners to analyze and determine the proposal’s impact. Concerns about the proposed rule include the comprehensive nature of the proposal which goes beyond the anticipated reform of improved disclosures, the timing of provisions requiring significant changes to the real estate settlement process, and comments directed at specific provisions including volume discounts, average cost pricing, price tolerances, a new definition of “required use” and a new “closing script” requirement which must be read aloud at closings.

NAR will submit additional comments to HUD and encourages all NAR members to submit their own comments regarding these changes. To submit your comments to HUD, please visit www.regulations.gov/search/index.jsp.

RESPA Proposed Rule

Tags: HUD, legislature, mortgages, RESPA