Federal housing regulators say they will "exercise restraint" for the first four months of 2010 in enforcing new regulations governing mortgage loan disclosures and settlement procedures.

The new rules, which the Department of Housing and Urban Development (HUD) has put forward under the authority of the Real Estate Settlement Procedures Act (RESPA), include a new good faith estimate (GFE) and HUD-1 settlement statement.

In a press release, HUD said the staff of its Mortgagee Review Board (MRB) will exercise restraint in considering RESPA enforcement actions against FHA-approved lenders if they can demonstrate they are making "a good faith effort" to comply with the new requirements.

HUD will consider whether the lender has relied on the new RESPA rule and other written guidance issued by the department, and the extent to which they have invested in technology and training to comply with the new rule.

HUD is also asking other federal and 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.

Industry groups including the Mortgage Bankers Association, the American Escrow Association and the American Bankers Association have repeatedly asked HUD to back down from the proposed RESPA rule changes and work with the Federal Reserve on a uniform loan disclosure form that also meets Truth In Lending Act requirements.

HUD has backed down from some aspects of rule changes first proposed last year, but said last month it would move forward with implementation of the new loan disclosure forms on Jan. 1 (see story).

One task envisioned by the Obama administration for its proposed Consumer Financial Protection Agency would be to develop a uniform mortgage disclosure form and put it forward for public comment within a year of the agency’s creation (see story).


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