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HUD Announces Mortgage Guidelines- But Can't Enforce Them

Posted by: Tim Halbur

13 November 2008 - 2:00pm

The Department of Housing and Urban Development says the new rules will help buyers understand broker's fees will limit fee increases, and they are currently seeking legislation to give them the power to enforce the rules.

"The rules update requirements of the Real Estate Settlement Procedures Act, known as Respa, a 1974 law that sets standards for home-purchase transactions. HUD Secretary Steve Preston said changes were needed because "many people made uninformed decisions" in taking out loans. That, he said, contributed to a surge in mortgage defaults.

HUD, which pushed ahead with the rules despite opposition from lenders and others involved in mortgage transactions, estimated the changes will bring savings of nearly $700 in loan-closing costs for the typical consumer.

In a news conference, HUD officials conceded they lack legal authority to penalize violators of the rule. Legislation would be required to give HUD those powers. But they said state and federal regulators of lenders and brokers can insist on compliance with federal rules and that the threat of class-action suits may keep lenders in line."

Full Story: HUD Unveils New Rules for Mortgages
Source: The Wall St. Journal, November 13, 2008
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The areas where we have severe blight and indications of more blight to come are basically the same as they ever were. How in the world are we ever going to move our community development selves into an alternative future that thinks differently about the challenges we face in our cities and low-income suburban and rural communities?
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