HUD Expands RESPA Investigations, Targets Reform by End of 2007

The states clicked off like a geography bee: Minnesota and Tennessee, Colorado and California — along with a half dozen more — as Ivy Jackson listed areas where companies are being investigated for not complying with RESPA laws. And then the Housing and Urban Development’s director of RESPA grinned at a conference of affiliated business leaders and joked: “If you got left out of those, don’t worry, we’ll get to you.” Jackson spoke at the Real Estate Services Providers Council, Inc. conference, an association of real estate broker-owners, real estate franchisers, mortgage lenders/brokers, title insurers/agents, home builders, home warranty companies and other settlement service providers throughout North America. RESPRO was finishing its annual three-day conference devoted to educating affiliated businesses in the home buying and financing industry.

Jackson said she bolstered HUD’s investigative staff to more than 20, while adding a private investigative firm. The federal agency will further review mortgage and title industry violations while increasingly interacting with state commissions to address such “hot button” items as predatory lending, mortgage fraud and illegal builder incentives are among the hotter targets. “We are looking at not only types of affiliated business arrangements,” Jackson said, “but there are still a lot of giving and accepting of things of value in the marketplace. We will be looking at those.” RESPA Reform, Back in the Spotlight Meanwhile, HUD Deputy Assistant Secretary for Regulatory Affairs Gary Cunningham said long-awaited RESPA reform may finally be near. Reform to the settlement procedures act, including standard disclosures prior to closing a mortgage, have long been discussed but often fizzled as regulators have found insufficient momentum to act. “We will have RESPA reform,” he said. “I think that you can look for it in 2007 by the end of the calendar year. I’m not sure it will happen, but we’ve done a lot of work on it. There seem to be some consensus around these core values. I think that’s something that we look forward to. It will benefit people in the industry to make the current process more uniform.”

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