A hotly-contested move by the U.S. Department of Housing and Urban Development to introduce a number of reforms to the Real Estate Settlement and Procedures Act came under fire this week from more than 240 lawmakers in the House of Representatives. House members signed a letter circulated by Reps. Ruben Hinojosa (D-TX) and Judy Biggert (R-IL) that says HUD’s RESPA reform proposal fails to improve and simplify disclosures of mortgage terms and settlement costs. “We are profoundly concerned that HUD’s proposed RESPA rule will hinder rather than help the recovery of the housing market,” says the letter to HUD Secretary Steve Preston. “We request that HUD withdraw its proposed RESPA rule and immediately commence a joint rulemaking process with the Federal Reserve Board.” Over a dozen housing groups lobbied members of Congress to sign the letter, which was circulated a few weeks ago. Earlier this year, when HUD first issued the RESPA proposal, the industry groups succeeded in getting 140 members of Congress to sign a petition requesting a 60-day extension of the public comment period. HUD agreed to a 30-day extension. “We believe that RESPA reform cannot be resolved in one sweeping change without considering and appreciating the many moving parts of a residential real estate transaction,” American Land Title Association president Gary Kermott said in testimony to key members of the House of Representatives earlier this year. The Mortgage Bankers Association has also weighed in on HUD’s proposal, arguing that any move to update RESPA be part of a larger effort in conjunction with the Fed to simplify the overall origination process for consumers. The industry lobbying group has suggested a combined Truth-in-Lending and good faith estimate as a possible solution. “Recent events demonstrate that borrowers also need additional clarity about the terms and cost of credit,which falls under the Fed’s responsibility under TILA,” said MBA president Jonathan Kempner. “For that reason, we strongly believe that HUD should link its efforts with the Board of Governors of the Federal Reserve so that both agencies work together in a careful, coordinated and comprehensive manner to truly simplify and improve the mortgage process for consumers.” The letter signed by members of the House echoes a similar sentiment, suggests that any RESPA changes “simplify, clarify and reduce the cost of the mortgage and real estate settlement process.” Settlement costs have continued to increase this year, despite the mortgage mess; a recent study by Bankrate.com found that average closing costs nationwide have risen 14 percent in 2007 compared to last year’s levels. Related link: full letter to HUD, complete list of signers