Monday, September 24, 2007
Prospects Brighter for Mortgage Cancellation Relief
As Congress reconvened following Labor Day, President Bush announced a package of proposals intended to provide consumers assistance with subprime loans and related mortgage problems. The sole tax proposal in the package was a recommendation that Congress enact mortgage cancellation tax relief. Staff has held several conversations with senior Ways and Means and Senate Finance Committee staff. These senior attorneys are favorably disposed toward the legislation, but there is no plan yet in place for attaching it to a larger bill in order to hasten its enactment. A tax package may come together in the late autumn. NAR will make every effort to attach the legislation to a tax bill and to assure that the relief will be available for mortgage cancellations that have occurred since the beginning of the year. Further, President Bush proposed only a temporary relief provision. NAR seeks a permanent rule.
HUD to Improve Disclosures and Standardize GFE under RESPA
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.
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.
FTC Consumer Alert
FTC Issues Warnings about Untruthful and Deceptive Mortgage Ads
On September 11, 2007, the Federal Trade Commission (FTC) warned mortgage brokers, lenders, and media outlets that some of the advertising claims being made about mortgage products may violate federal law. The FTC is concerned about false advertising claims on the Internet; in newspapers and magazines; and in direct mailings, e-mail, and faxes. For example, even after all the recent publicity about abusive mortgages, some ads continue to promote extremely low monthly payments without disclosing the terms of the loan, including sharp payment increases and balloon payments. The FTC sent warning letters to more than 200 advertisers and media outlets and issued a press release to publicize its actions.
On September 11, 2007, the Federal Trade Commission (FTC) warned mortgage brokers, lenders, and media outlets that some of the advertising claims being made about mortgage products may violate federal law. The FTC is concerned about false advertising claims on the Internet; in newspapers and magazines; and in direct mailings, e-mail, and faxes. For example, even after all the recent publicity about abusive mortgages, some ads continue to promote extremely low monthly payments without disclosing the terms of the loan, including sharp payment increases and balloon payments. The FTC sent warning letters to more than 200 advertisers and media outlets and issued a press release to publicize its actions.