The Department of Housing and Urban Development settled with two mortgage companies this week suspected of violating the Real Estate Settlement Procedures Act, but next week, reams of pending cases will transfer to the Consumer Financial Protection Bureau. In November 2008, HUD issued new RESPA regulation, establishing a standard Good Faith Estimate form and process and an expanded HUD-1 Settlement Statement. To be in compliance with RESPA, and help assure fair prices for consumers, actual costs at closing must fall within established tolerance ranges. These new disclosures were implemented in January 2010. Since then, HUD opened more than 1,500 cases against mortgage companies suspected of violating RESPA, said Teresa Payne, the associate deputy assistant secretary for regulatory affairs at HUD. Such cases and 37 HUD employees will transfer over to CFPB headquarters when the new agency opens July 21. HUD struck settlements with Prospect Mortgage for $3.1 million and Fidelity National Financial for $4.5 million this week. In each case, HUD claimed the company gave kickbacks to real estate agents, brokers, lenders and servicers for referring business back to the company. Payne, who will be moving to the CFPB herself, said such compensation can only be provided if the broker or agent actually performs a necessary service “distinct from their primary services and for which there are not duplicative fees.” Also, the compensation must “be reasonably related to the value of the services actually performed.” Elizabeth Warren, the architect of the CFPB, has repeatedly said before Congress that the bureau will have more teeth than its regulatory predecessors. The mission, she has made clear, will be to put the industry under constant scrutiny to make sure transparency and consumer protection is upheld. Payne acknowledged the new RESPA requirements have already shown its advantages. “Prospective borrowers are receiving more accurate Good Faith Estimates and costs at closing are being held within tolerance ranges,” Payne said. “Several commenters noted that the new GFE form is holding lenders accountable for low-balling and bait-and-switch, which have made estimates closer to the actual closing costs.” Write to Jon Prior. Follow him on Twitter @JonAPrior.