Joint letter on RESPA REFORM

October 14, 2009

The Honorable Barney Frank                                     The Honorable Spencer Bachus

Chairman                                                                Ranking Member

Committee on Financial Services                                Committee on Financial Services

U.S. House of Representatives                                   U.S. House of Representatives

Washington, D.C. 20515                                           Washington, D.C. 20515

Dear Chairman Frank and Ranking Member Bachus:

As the Financial Services Committee considers H.R. 3126, the Consumer Financial Protection Agency Act, the undersigned organizations representing the real estate finance industry urge the committee to adopt an amendment, expected to be offered by Representative Judy Biggert, that would require the Department of Housing and Urban Development (HUD) to provide for a more gradual implementation period for its Real Estate Settlement Procedures Act (RESPA) rule.

The RESPA rule is scheduled to take full effect on January 1, 2010 - less than three months from now. Despite the best motivations of HUD, and the sincerest efforts of the industry, there are simply too many unresolved issues to allow the industry to be fully RESPA-compliant by the first of the year. HUD's guidance has come far too late in the process and has been inadequate and often contradictory. Due to unresolved issues and critical unanswered questions, many lenders and settlement service providers are unprepared to comply. This, in turn, will cause very inconsistent implementation and confusion for consumers seeking to purchase a home.

The Biggert amendment would require HUD to postpone the implementation date of its RESPA reform rule for a reasonable amount of time and take several steps to achieve effective implementation. It would also allow both new and old forms to be used during the transition period. And it would require that, going forward, HUD and the Federal Reserve coordinate their regulatory efforts to ensure comparable RESPA and Truth in Lending Act (TILA) disclosures.

RESPA reform is important to consumers and the industry. Passage of the Biggert amendment would give all participants the additional time they need to get it right and assure full compliance.

Sincerely,

American Bankers Association

Consumer Bankers Association

Consumer Mortgage Coalition

Financial Services Roundtable

Housing Policy Council

Mortgage Bankers Association

National Association of Federal Credit Unions

National Association of Mortgage Brokers

Real Estate Services Providers Council, Inc.