FEDERAL LEGISLATION
ISSUE/BACKGROUND
Such disclosure should clearly spell out the following items for borrowers: their interest rate, the points they are being charged if any, the total amount of their closing costs, and their monthly payment amount
Issue
As a Federal Trade Commission study pointed out last year, emphasizing compensation disclosures rather than consumer costs confuses consumers and results in higher cost loans for consumers. The findings of the FTC study suggested new disclosures are need instead of the good faith estimate. These disclosures should clearly spell out the following items for borrowers: their interest rate, the pints they are being charged if any, the total amount of their closing costs, and their monthly payment amount. By disclosing this information, borrowers can truly compare the costs of each mortgage product available to them thereby increasing the likelihood that they obtain the loan product that best serves their financial means. Such changes will simplify the closing procedures by reducing confusion among consumers and increasing the number of homeowners in our country.
STATUS/OUTLOOK
In March of last year, HUD withdrew the proposed RESPA reform. Afterwards, HUD Secretary Alphonoso Jackson promised to first consult with Congress and garner a 75 to 80 percent industry consensus on reform before re-proposing the rule. In recent appearances, Jackson has communicated that HUD is committed to reforming mortgage settlement rules under RESPA this year, although no timetable has been set. To this end, Jackson has stated that he will be meeting with Congressional representatives and plans to consult with industry groups in preparation for re-proposing the rule. HUD officials have assured DFWAMB leadership opportunities to air our concerns with any proposed RESPA regulation.
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