HUD Proposes RESPA Reform

HUD = US Department of Housing and Urban Development

RESPA = Real Estate Settlement Procedures Act

The purpose of RESPA is (according to HUD):

The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. The purposes of RESPA are

1. to help consumers become better shoppers for settlement services and
   
2. to eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services.

All good things. RESPA is what drives things like Good Faith Estimates from lenders, and the standardized HUD-1 closing settlement sheet. (available for download on our site.)

Today HUD proposed reforms to RESPA.

HUD claims that simplifying and standardizing home buying disclosure forms could save the average buyer almost $700 at closing — chiefly by making it easier to “comparison shop” lenders and settlement service providers (typically title companies in Arizona).

If you really want the details of the proposal, including sample forms, you can download the 96 page PDF file here.

I do find it somewhat ironic that HUD releases a 96 page, three text column document that discusses “simplification”. But that’s the government for you.

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[tags]HUD, RESPA reform, 96 pages to explain simplification[/tags]

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