HUD Issues RESPA FAQ's in Advance of January Implementation of Changes--Urges Restraint on Enforcement in First 120 Days.

HUD press release is HERE. From PR:

The US Department of Housing and Urban Development (HUD) announced that the first four months of 2010, the staff of the Mortgagee Review Board (MRB) will exercise restraint in enforcing new regulatory requirements under the Real Estate Settlement Procedures Act (RESPA), due to take full effect on January 1.

The MRB instructed its staff to exercise such restraint in considering an action against FHA-approved lenders (includes reverse mortgage lenders) who have demonstrated that they are making a good faith effort to comply with RESPA’s new requirements said a statement from HUD.

In addition, HUD is asking other federal and relevant state enforcement agencies to exercise the same 120-day restraint in enforcement for non-FHA originators and other settlement service providers who demonstrate the good faith effort to implement RESPA’s new rules.

In determining whether a mortgagee has made a good faith effort, MRB staff will consider whether the mortgagee has relied on the new RESPA rule and other written guidance issued by the Department, and the extent to which the mortgagee has made sufficient investment and commitment in technology, training, and quality control designed to comply with the new rule.

FAQ's (all 48 pages of them) can be found HERE.

HUD's RESPA website is HERE.

Editorial Comment: I am sure the 120 day restraint was to avoid industry calls to formally delay implementation date, so it may be clever politically , but will put HUD on the hook to defend any decision it makes to ENFORCE the rules prior to May 1st, instead of showing restraint. Also, if state enforces RESPA provisions prior to May 1st, they will likely get hit with the "HUD did it , why can't you" argument.

Originally created and posted on the Oregon Housing Blog.