FTC Staff Files Comments with HUD on Proposed Amendments to RESPA Regulations

WASHINGTON, DC - The Federal Trade Commission has authorized its staff to file comments with the U.S. Department of Housing and Urban Development (HUD) concerning proposed amendments to regulations implementing the Real Estate Settlement Procedures Act (RESPA).

RESPA and its implementing regulations govern settlement services for most residential purchase, refinance, and home equity mortgage transactions. RESPA requires that consumers receive certain disclosures during the mortgage process, including the Good Faith Estimate (GFE) within three days of the loan application and the HUD-1 Settlement Statement at closing.

On March 14, 2008, HUD issued a proposed rule to revise mortgage disclosures required under RESPA. In comments prepared by the Bureau of Consumer Protection, Bureau of Economics, and Office of Policy Planning, the FTC staff states that some of the proposed modifications could help consumers better understand and compare loan terms and closing costs. However, staff believes that some of them also may have the unintended consequence of further complicating the already complex mortgage process. The FTC staff believes consumers would benefit most if the federal government commenced a comprehensive effort to reform federal mortgage disclosures.