“MBA applauds HUD’s RESPA reform efforts and believes RESPA reform has the potential to greatly improve disclosures to consumers concerning their closing costs,” said Kempner.  “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.  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.”

Specifically, MBA’s comments call on HUD and the Fed to work together to produce a combined TILA and Good Faith Estimate (GFE) form and implement it at the same time to replace the current RESPA and TILA disclosures that are provided to borrowers at the time of application.  MBA and its members have developed a proposed combined form, as well as a comparable revised HUD-1, which MBA included with its comment letter.

In the event that HUD decides to move forward to finalize the rule without the Fed, MBA proposes HUD do the following:
• Pare back its proposal and forms to address only closing cost issues (consistent with its statutory authority);
• Make the form given at the time of loan application and the HUD-1 more consistent so borrowers can easily compare their costs;  
• More clearly disclose both lender fees and mortgage broker fees on the GFE and HUD-1;
• Revise the tolerances contained in the proposal with bright line safe harbors to reduce surprise charges at settlement;
• Eliminate the “closing script”  which HUD says would add 45 minutes to each closing;
• Allow lenders and brokers to use “average cost pricing”;
• Also allow “volume discounts” without the restrictions proposed so borrowers can realize the maximum benefit of such arrangements;

In its letter, MBA also states that it would support complementary statutory changes that would truly simplify and improve the mortgage process.

A copy of MBA’s comment letter, including its proposed revised GFE and HUD-1 forms, can be found at www.mortgagebankers.org.

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:  www.mortgagebankers.org.