2 minute read | July.06.2005
At a June 27, 2005 press conference, Department of Housing and Urban Development ("HUD") Secretary Alfonso Jackson announced HUD's roadmap for reform of its regulations implementing the Real Estate Settlement Procedures Act of 1974 ("RESPA"). HUD states that it seeks to "update, simplify and improve the disclosure requirements for mortgage settlement costs and help control these costs for consumers."
Because of both ongoing consumer confusion at settlement that RESPA was meant to alleviate, and the general understanding that RESPA was propping up prices to consumers rather than lowering them, HUD has made efforts in the past to reform RESPA. The most recent effort began with a proposed rule published in the Federal Register on July 29, 2002, that included both a safe harbor from RESPA Section 8 liability for settlement service providers offering a specified "guaranteed mortgage package" ("GMP") and a requirement that certain disclosures on the Good Faith Estimate ("GFE") be exact. After months of comments and meetings with interested groups, HUD eventually sent a draft final rule for review by the Office of Management and Budget. That draft was abandoned in March 2004 prior to final adoption because settlement services providers and consumer advocates strongly disagreed both with HUD and one another as to the best approach for reform.