Todd is the founder and president of Federal Title & Escrow Company. He received his J.D. from Drake University Law School and is a member of the DC Bar and Maryland and Virginia Land Title Associations. He has been practicing real estate law in the DC area since 1991.
Mr. Farwell is correct in his assessment. What he politely omitted was the fact that the new regulations are acutally ANTI-competitive. With the new rules, most consumers will "play it safe" and elect to choose the settlement service provider from the lender's required short list. It is likely that the lender's short list will consist of the lender's affiliated settlement company ("legal kickback" company, a.k.a., an ABA)or the referring real estate agent's affiliated company. As a result, the consumer is discouraged from shopping for settlement services in which they could save upwards of a thousand dollars. The new regs do not encourage shopping for settlement services; instead they further enable the Affiliated Business Arrangements that have been the subject of numerous unfair trade practice complaints. HUD has indeed missed another opportunity.
