Walt Albro is a former senior editor for REALTOR® Magazine.
RESPA Reform: NAR Task Force Leads the Charge
September 1, 1997
WASHINGTON, D.C.--REALTORS® have raised the flag on reform of the federal law governing real estate settlement services, known as RESPA.
A task force of REALTORS® gathered here in late August and hammered out the framework of a proposed RESPA replacement law more favorable to one-stop shopping. The 12-member task force, convened by Russell K. Booth, president of the NATIONAL ASSOCIATION OF REALTORS®, pinpointed essential elements that the real estate industry believes should be included in reform of the Real Estate Settlement Procedures Act.
The proposed revisions will provide guidance this fall when a consortium of industry and consumer groups, including NAR, begins work on a RESPA reform package. This consortium, the Mortgage Reform Working Group, is expected to issue a recommendation to Congress in January.
The REALTOR® task force is one in a series of actions taken by NAR leadership in recent weeks to help bring about fundamental change in the 23-year-old federal law. Other steps included
- Testimony by NAR President-elect R. Layne Morrill before a public forum on RESPA and the related Truth in Lending Act.
- Presentation of consumer research on real estate settlement issues.
- A letter to U.S. Housing and Urban Development Secretary Andrew Cuomo requesting delay until Dec. 31, 1998, of the final RESPA rule dealing with employer payments to employees.
Morrill testified on July 30 before a forum sponsored by HUD and the Federal Reserve Board. Morrill told the forum that RESPA needs to be rewritten, since it "no longer reflects the realities of the marketplace."
The forum was intended to address simplification of RESPA and the Truth in Lending Act. "[Simplification] is just a small piece of a much larger issue that requires your attention, and that is fundamental RESPA reform," Morrill said.
"As we all know, the real estate and mortgage lending industries are rapidly changing. Technological advances and consumer demand for increased convenience and service in the homebuying process are the driving forces behind the growth of innovative business development such as . . . one-stop shopping."
On Aug. 8, NAR presented consumer research to the HUD-Fed forum to back up Morrill's comments. The research showed that homebuyers prefer to see the settlement process streamlined. In a nationwide poll of 808 recent homebuyers, 78 percent said they'd be in favor of having the option of getting some or all of their homebuying services handled by one-stop shopping through the real estate company.
Nearly half (46 percent) of those surveyed favor government rule changes to make it easier for real estate companies to offer one-stop shopping, even after hearing all the arguments against such changes.
The new RESPA regulations proposed by HUD represent an unfair effort by HUD to micromanage real estate companies, NAR says. In his letter to HUD Secretary Cuomo, Booth promised that NAR wouldn't drop the RESPA reform ball even if NAR wins a delay on the employee compensation final rule. "Delaying this rule will not alter our resolve," he wrote.
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Updated: January 14, 2022