More than 200 members of Congress have expressed their concerns to the Office of Management and Budget about the Department of Housing and Urban Development's RESPA reform proposal. The proposal has been under review by OMB, one of the last steps before approval of a final rule.
In a letter to OMB, the members expressed their support for efforts to simplify and improve mortgage transactions for consumers but urged OMB to reject the rule as final and return it to HUD with instructions to issue a revised proposal for additional public comment.
The letter noted that the proposed rule would radically change the mortgage marketplace for consumers and industry. HUD has received tens of thousands of letters on the proposed rule and congressional committees have held three hearings. Many commenters say the proposal would lead to loss of important RESPA consumer protections, and long-term increases in mortgage costs due to decreased competition as many small businesses would not be able to compete in the new environment-concerns ICBA has expressed to HUD, Congress and most recently, OMB.
House Financial Services Committee Chairman Michael Oxley (R-OH) said this week he would like to see an additional comment period, particularly if HUD has made major changes to the original proposal. Oxley plans to continue to monitor the proposal's progress to ensure it will be fair and aid consumers in shopping for low-cost mortgages.