HUD Proposes RESPA Changes; NAR Pushes for Reform
June 1, 1997
WASHINGTON, D.C.--The U.S. Department of Housing and Urban Development has proposed Real Estate Settlement Procedures Act regulations that would relax restrictions governing employer payments to employees for marketing the settlement services of an affiliated company.
The proposed revisions have been sent to Congress and were expected to be published in the Federal Register in early May for public comment, says Rebecca Holtz, director of HUD's Interstate Land Sales, RESPA.
The proposed changes come after Congress passed legislation in 1996 to delay the regulations' effective date until July 31, 1997, to allow HUD to address concerns of trade groups, including the NATIONAL ASSOCIATION OF REALTORS®, regarding the issue of employers compensating employees for marketing affiliated services. Holtz says the earliest time HUD can issue a revised final rule is July 31, 1997.
HUD regulations currently allow an employer to compensate employees for referrals and cross-marketing activities without restriction.
Meanwhile, NAR has continued its efforts to bring about reform of RESPA. NAR officials, joined by other industry and consumer groups, met in April and May to discuss an overhaul of the regulations.
During one of the meetings, Rep. Rick Lazio, R-N.Y., chairman of the Housing and Community Development Subcommittee of the House Banking Committee, urged the groups to identify concerns about RESPA and report on them by June 30. He also encouraged ongoing meetings between the groups to propose solutions for reforming the act.
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