HUD recently released testing data it developed on previous GFE and Mortgage Packaging proposals from 2002. The results will be used to develop an improved GFE as early as this fall. NAR believes it is more likely, however, that after President Bush announced his package of subprime reforms on August 31 that a new GFE proposal will come out sometime after the Administration’s FHA proposal is taken up by the Senate.
HUD has abandoned its proposal that would have allowed for bundling of some settlement services for a single fee (known as a Mortgage Packaging Option) and which would have qualified for an exemption under the section eight prohibitions against kickbacks and unearned split fee arrangements of RESPA. Instead, HUD has turned its focus on improving the GFE.
HUD’s actions are in line with NAR’s efforts over the past five years to improve GFE disclosures and NAR’s opposition to the Mortgage Packaging Option. NAR President Pat V. Combs reiterated NAR’s position to HUD last month in a letter urging an improved GFE and NAR will continue to place itself in the center of this important RESPA reform debate when HUD announces its proposed GFE. In the meantime, NAR will continue its aggressive RESPA education initiative by hosting a detailed RESPA education session on Wednesday November 14 at 1:30 p.m. at its Annual Convention & Expo in Las Vegas.
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