HUD Counsel Clarifies Some Broker Fees Under RESPA.

WaPo has Kenneth Harney's column on the subject HERE. From the column, a summary of HUD Counsel Karovsky's letter:

"Kanovsky warned that if the total charges "exceed the amount of the commission for listing and selling the home that are reflected in the real estate broker's or agent's listing agreement," then HUD has the legal power to review the extra charge "to determine whether additional services were provided" to justify the add-on.
If little or no services are performed, HUD would treat this as a violation of the Real Estate Settlement Procedures Act, subject to significant penalties. Kanovsky also warned about fees charged when there is no contract or agreement permitting the agent or broker to impose those charges. For example, if a listing broker charged the buyer an administrative fee of $250 but there was no contractual language sanctioning the charge, HUD might treat that add-on as an illegal fee."

Don't know why column didn't provide link to actual HUD Counsel's letter, but you will find it HERE.

Originally created and posted on the Oregon Housing Blog.

FHA Does Away with 1% Loan Origination Fee Limit as Part of RESPA Reforms.

FHA has issued a new mortgagee letter HERE, explaining the changes it made to FHA fees and disclosures to comply with RESPA reforms going into effect January 1st.

As a result of regulatory changes to 24 CR § 203.27, FHA no longer limits the origination fee to 1 percent of the mortgage amount for its standard mortgage insurance programs. However, both Home Equity Conversion Mortgage (HECM) and Section 203(k) Rehabilitation Mortgage Insurance Programs retain their statutory origination fee caps

Originally created and posted on the Oregon Housing Blog.

HUD Publishes New Consumer RESPA Booklet.

PDF of booklet (Shopping for Your Home Loan) is HERE.

HUD RESPA page is HERE.

Originally created and posted on the Oregon Housing Blog.

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.

HUD Publishes New RESPA FAQ's.

The NEW HUD 15 page FAQ about implementation of RESPA rule changes is HERE.

HUD's main RESPA page is HERE.

Originally created and posted on the Oregon Housing Blog.

HUD Moves Forward on RESPA Rule, Kinda.

HERE's the advance notice of Federal Register publication. Some provisions effective next year, some not.

Required use provision is taken out in final rule. Early Jan 2009 Housing Wire story HERE provides some background about this provision.

Bill that passed House last week (H.R.1728) would require RESPA rule to be pulled back and restart of the multiyear process, maintaining status quo for years. (Don't let 6 month language in Section 106 fool you)

In re House and RESPA, recall my earlier post HERE about House members falling over themselves to try to suspend/kill proposed rules. All of Oregon House members except Hooley jumped on that pre-election bandwagon.

Editorial comment: Anyone really thinks key real estate industry players want "regulatory reform" or "consumer protections"?

HUD Flinches/Delays on RESPA Reform.

Press release HERE.

HUD Flinches on Implementation Date for One Provision of RESPA Rule.

Was provision relating to home builders, would have kicked in this month.

Housing Wire has story HERE.

In brief:

"The U.S. Department of Housing and Urban Development will be delaying implementation of the “required use” provision of the final Real Estate Settlement and Procedures Act (RESPA) rule, which was to take effect on Jan. 16 and will prevent home builders from offering incentives or discounts to buyers that use specific settlement services providers, like brokers or lenders."

Homebuilders Sue HUD Over RESPA Rules.

Story HERE reports local (Ohio) home builder suit against HUD RESPA final rule, but also says National Association of Homebuilders has joined the suit.

(I had posted previously about seperate RESPA suit filed by mortgage brokers HERE.)

Man Bites Dog: Mortgage Brokers Association Sues HUD Over RESPA.

To use an ESPN Monday Night NFL Countdown phrase, "C'Mon MAN"

Housing Wire has story HERE.

Gist of suit, according to story:

"The lawsuit against HUD states that the Final Rule is “arbitrary and capricious,” contrary to the intent of Congress, and fails to offer any rational reasons for its rejection of alternative approaches. NAMB says the Final Rule discriminates against mortgage brokers with the required broker-only disclosure of yield spread premium (YSP), placing them at a permanent disadvantage in the marketplace."

HUD Publishes Final RESPA Rule in Federal Register.

It's finally and officially HERE, and reduced to (only!) 96 pages in length, including the new GFE and HUD-1 forms.

ALERT: HUD Final RESPA Rule- Available NOW.

It's HERE, all 341 pages! (Pages 5-8 including listing of changes from proposed rule).

May still be formally published Friday in Federal Register.

HUD's full RESPA page is HERE.

HUD to Issue Final RESPA Rule Friday.

News Release from HUD is HERE.

Comment from HUD Secretary is HERE.

WSJ story is HERE.

I have looked at Federal Register today and for tomorrow and can't yet find the actual final rule; in HUD Secretary's comments he indicated that it will go on public display in Federal Register on Friday.

In interim, these are links to new Good Faith Estimate and HUD 1 forms.

One of comments in HUD's news release says 'To facilitate comparison between the HUD-1 and the GFE, each designated line on the final HUD-1 will now include a reference to the relevant line from the GFE/" Pleased to say this is consistent with comment I and many others made on the proposed rule.

RESPA Rule Advances: OMB Clears HUD Final RESPA Regs.

The HUD RESPA final rule has made it through OMB clearance, and presumably is on its way to publication in the Federal Register by the administration imposed November 20th deadline for publication of final rules with significant economic impact.

OMB cleared the rule on November 7th, according to the summary posted HERE. (The "consistent with change" comment may indicate that OMB made some changes to the rule as proposed by HUD).

HUD Regulations Now at OMB for Review.

If you go to the OMB page HERE, and in the pull down box "Regulations under EO 12866 Review" you select HUD, it will produce a listing of HUD regulations now at the Office of Management and Budget for review.

Currently there are three rules from HUD at OMB for review. They include a RESPA final rule, a proposed rule for the Housing Voucher program and a proposed income determination rules for public and assisted housing programs.

The proposed rules are overdue for publication, I expect if the final RESPA rule is issued that it will not occur by the projected end of October date, but after the election.

House Finanical Services Hearing on RESPA Next Tuesday.

House Financial Services Hearing on HUD proposed RESPA rules is scheduled for next Tuesday.
Hearing website where writtten testimony and hearing can be viewed next week is HERE.

Expect lots of bashing and reasons why rule should be delayed, yet again.

To find my prior posts on proposed RESPA rule, use search term "RESPA" in text box at top left of blog.

HUD Says Proposed RESPA Rules Won't be Withdrawn, Despite House Members Request.

Despite letter from 242 House Reps requesting withdrawal of proposed RESPA rules, HUD is currently saying that the proposed RESPA rule with NOT be withdrawn. News story with background is HERE; letter from Reps is HERE.

Mortgage Bankers Association RESPA Comments.

From their website, HERE.

My RESPA Proposed Rule Comment.

HERE is a comment I filed on the RESPA proposed rules; HERE is the referenced PDF attachment.

My comment suggests a "cross walk" between the Good Faith Estimate and the HUD 1 Forms; I include sample entries to show how this would work.

NOTE: TODAY is the closing date for RESPA comments. You can file your comments HERE.

Speech from FHA Commissioner at National Press Club.

FHA Commissioner speech today at National Press Club. His prepared remarks are HERE.

Remarks include announcement that proposed rule making on down payment assistance will be sent this week for publication in the Federal Register.

Interestingly, his delivered remarks include a pitch on RESPA and a commitment to complete rule making by the end of this administration. In response to a question he said there will be no further extension beyond June 12th.