The U.S. Department of Housing and Urban Development's (HUD) Mortgagee Review Board (MRB) will ‘exercise restraint in enforcing new regulatory requirements under the Real Estate Settlement Procedures Act (RESPA)’ for the first four months of 2010, the agency announced Friday.
The MRB instructed its staff to exercise such restraint in considering an action against Federal Housing Administration (FHA)-approved lenders that have demonstrated that they are making a good-faith effort to comply with RESPA's new requirements. The new requirements take full effect beginning Jan. 1, 2010.
HUD is asking other federal and relevant state enforcement agencies to exercise the same 120-day restraint in enforcement for non-FHA originators and other settlement service providers that demonstrate the good-faith effort to implement RESPA's new rules.
In determining whether a mortgagee has made a good-faith effort, MRB staff will consider whether the mortgagee has relied on the new RESPA rule and other written guidance issued by HUD, and the extent to which the mortgagee has made sufficient investment and commitment in technology, training and quality control designed to comply with the new rule.
‘We will work with those who are making an honest effort to work with us as we implement these important new consumer protections,’ says HUD Secretary Shaun Donovan. ‘While we will not delay implementation of RESPA's new requirements, we are sensitive to the concerns of the industry as it integrates these new rules into their day-to-day business practices.’
In October, several trade groups wrote to HUD Secretary Shaun Donovan and FHA Commissioner David Stevens urging HUD to provide a reasonable implementation period before compliance becomes mandatory.
‘Despite the best motivations of HUD…we are headed for a mortgage market train wreck on the tracks of RESPA compliance," wrote the groups, which included the Mortgage Bankers Association and the American Bankers Association.