Industry NewsMortgage

NAR: HUD underestimates RESPA reform cost

Public comment period closes Thursday

A study funded by the National Association of Realtors claims proposed changes to loan disclosures could add more than $400 to the cost of obtaining a mortgage, wiping out much of the cost savings regulators say consumers would realize. The Department of Housing and Urban Development (HUD) proposes changes to the Real Estate Settlement Procedures Act, or RESPA, including a new good faith estimate form and incentives that would encourage the packaging of settlement services (such as title insurance) with loans. HUD claims the moves will save consumers about $8.35 billion a year, or more than $700 per loan, by improving their ability to comparison shop and increasing competition and cost efficiency among lenders and settlement services providers. Although industry opposition to HUD's RESPA reform plan has been less intense than a 2002 proposal with more concrete incentives for packaging, critics were able to get HUD to extend the public comment period by 30 days. The window ...