As currently written, both the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) requirements are confusing to consumers and cumbersome for industry practitioners. Comprehensive reform of RESPA and TILA could improve access to mortgage finance and accommodate technological changes that can benefit consumers, while at the same time quelling essentially fruitless litigation that continues to plague the industry and increases costs to consumers. Moreover, by making the mortgage transaction much more transparent to the consumer, reform could also significantly reduce abusive lending practices. On March 14, 2008, the U.S. Department of Housing and Urban Development (HUD) announced a proposed rule to reform the RESPA regulations, which would revise the GFE, HUD-1, and establish new requirements affecting lenders, brokers, title agents, and other parties at application and closing. MBA worked closely with a task force of MBA members to develop a range of reform options that will truly improve the settlement process and reduce costs for the mortgage industry and consumers. These options include a simplified GFE and HUD-1 that would be accompanied by regulatory changes to bring efficiencies to the market to lower consumer costs. MBA also encouraged HUD to work with the Board of Governors of the Federal Reserve System to coordinate its efforts to reform mortgage disclosure regulation through RESPA and TILA. These options are detailed in the official comments submitted by MBA to HUD on June 11, 2008.
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