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Under Fire: At its first NAMB West Conference, the group's executive board discusses RESPA and regulatory reform efforts.

Article Excerpt
BRAD: Things in the industry have changed since my fellow editors spoke with the NAMB board at the annual convention in June. At the time we are speaking here there is a rumor that the Department of Housing and Urban Development is about to issue a new Real Estate Settlement Procedures Act reform proposal. In addition, H.R. 3915 (which at the time had not been passed by the House of Representatives, but would be approved shortly thereafter) is on the front burner. Do you have any comments about the RESPA proposal?

GEORGE: We've heard that the good-faith estimate is very similar to what it was to when it was proposed in 2001, 2002. The issue with that was the credit back of the (yield-spread premium) to the customer, (plus) it doesn't include banks (for disclosing YSP), it doesn't include anyone but the mortgage brokers. When this disclosure was tested not once, but twice, the consumers were confused, they chose the wrong good-faith estimate when compared side-by-side. So we have a concern. It was broken then and to take the same broken good-faith estimate and propose it again is wrong. We are for RESPA reform done right. An equal playing field makes it easy for the consumer and if we had that, I think you would see some strong support on our side.

MARC: I think one of the things that HUD is forgetting is the original idea of RESPA reform was to simplify the mortgage process because it was too confusing. And according to two studies conducted by the Federal Trade Commission, they said that HUD's approach was anything but simplification, that it created more confusion and would end up costing the consumer millions of dollars. I think what HUD really needs to do is to revisit this and take into consideration the two FTC studies and incorporate that into any proposed rule they come out with.

BRAD: Is HUD being stubborn?

HARRY: We've have had some conversations (with HUD) and my comments to them have been anything less than all originator channels being treated equally is not going to be acceptable to us. They also have their own study which says people do understand the difference on the (rumored to be proposed four page GFE). But I don't see how you can say anything is being simplified when you are moving from a one-page GFE to a four-page GFE. You know how confused the borrower is to start with. So it is not really simplifying anything. The GFE we sent up there as a suggestion is a one-page with the same numbers as the HUD-1. So they can take the GFE to the closing and they can compare it. If we are going to help the consumer, in the end everybody has to be treated equally and everybody has to disclose the same thing.

GEORGE: As Harry said, it mirrors the HUD-1, so it makes it easier for the customer to compare what was originally disclosed and what their final...

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