PUBLIC SUBMISSION | As of: November 20, 2009 Tracking No. 80402fd8 Comments Due: May 13, 2008 |
Docket: HUD-2008-0028
FR-5180-P-01
Real Estate Settlement Procedures Act (RESPA): Proposed Rule To Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs
Comment On: HUD-2008-0028-0001
FR-5180-P-01: Real Estate Settlement Procedures Act (RESPA): Proposed Rule To Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs
Document: HUD-2008-0028-0020
Comment Submitted by James Caldwell, First Citizens State Bank
Regarding: Department of Housing and Urban Development
24 CFR Parts 203 and 3500
(Docket # FR-5180-P-01)
RIN 2502-A161
Real Estate Settlement Procedures Act (RESPA): Proposed rule to simplify and
improve the process of obtaining mortgages and reduced consumer settlement
costs.
This correspondence is in response to the subject proposed RESPA Act changes
appearing in the Federal Register dated 3/14/08, Volume 73, #51.
I see a number of proposed changes that I think would negatively impact the
consumer:
1. In the Good Faith Estimate shown on page 14097, clarity needs to be
added that a customer does not have to lock in the rate at the time the Good Faith
Estimate is given. It appears as though the rate is shown as an item that can not
change. That could be very confusing and lead to only best efforts pricing which is
higher than cash settlement. Many clients are not ready to lock in a rate at the
time they submit their application. There needs to be greater flexibility within the
form to allow clarification that pricing/rate can be set at a later date.
2. Items such as surveys and pest inspections can vary significantly
between properties and need to have greater than a 10% flexibility for variance
between the GFE and RESPA.
3. The proposed Good Faith Estimate is put into a narrative form which
seems very busy and is less readable than the concise format of the existing
Good Faith Estimate. This GFE needs to be cleaned up and reduced to a 1 page
format. If not, the customer may not be inclined to read it and they will be less
informed than under the current program.
This voluminous attempt at simplicity and clarity is an oxymoron as well as a huge
step backwards. Try it out on some consumers, I have, and you will find that it is
less consumer friendly than the existing GFE. You need to roll this out into the
real marketplace rather than mere desk top planning. This needs real market
testing with an independent marketing firm to test its ?simplicity and clarity? with
the consumer. I think you will then understand my concern.
The real issue is putting All Lenders under the same Regulation and disclosure
and enforcement as the banking industry. If that was done none of this proposal
would even be considered.
If you have questions on this please give me a call.
Sincerely,
Jim Caldwell
Phone: 262-473-1400
jcaldwell@firstcitizensww.com