Alert July 01, 2008

FTC Staff Files Comments with HUD on Proposed Amendments to RESPA Regulations

The FTC authorized its staff to file comments with HUD concerning proposed amendments to regulations implementing the Real Estate Settlement Procedures Act. In its comments, the FTC staff states that some of the proposed amendments could help consumers better understand and compare loan terms and closing costs. However, the FTC staff believes that some of the changes may have the unintended consequence of further complicating the already complex mortgage process. The FTC staff believes consumers would benefit most if the federal government undertook a comprehensive effort to reform federal mortgage loan disclosures. FTC staff also recommends that HUD reconsider its proposed expansion of the definition of “required use” of services that affiliated businesses provide, believing that the expanded definition could prevent consumers from benefiting from lower prices that can result from bundling related services. Click here for the FTC’s press release and here for the FTC’s comments.