Extend public comment period?

It's official -- industry groups are asking HUD to double the public comment period to 120 days. Representatives Ruben Hinojosa, D-Texas, and Judy Biggert, R-Ill., who led the charge in 2004, are circulating a "dear colleague" letter to build support for extending the public comment period. See Inman Blog.

Here's the text of the Hinojosa/Biggert letter:

Dear Colleague:

Please join us in urging Department of Housing and Urban Development (HUD) Deputy Secretary Roy Bernardi to extend from 60 to 120 days the public comment period for HUD’s proposed rule to update the Real Estate Settlement Procedures Act (RESPA). The current 60-day comment period, which is set to close on May 13, 2008, provides for an inadequate amount of time for the public to review and comment on such an extensive rule that will have significant implications on the housing industry. It is vitally important that HUD receive detailed and thoughtful comments from the public and all interested parties, which is why it should extend the public comment period.

The only federal law governing the mortgage loan process, RESPA was enacted in 1974 to prohibit certain real estate practices and make more transparent the settlement process for residential real estate. In short, the law and the regulations it prompted aimed to:

--provide home buyers and sellers with a more advanced and thorough disclosure of settlement costs; --eliminate kickbacks or referral fees that unnecessarily increase the cost of certain settlement services; --reduce the amount home buyers are required to place in escrow accounts for the payment of property taxes and hazard insurance; and --reform and modernize local land and title recordkeeping.

Given the significance of this law and its regulations, any changes should be thoroughly vetted, especially at this time when our economy is in such a fragile state. We need to ensure that any HUD updates to RESPA regulations do not negatively impact the home buying process and exacerbate the current economic slowdown. Therefore, we urge you to join us in requesting that HUD extend from 60 to 120 days the public comment period on its proposed RESPA rule.

This request has the support of the Mortgage Bankers Association (MBA), the National Association of Realtors (Realtors), the American Bankers Association (ABA), the Credit Union National Association (CUNA), the National Association of Federal Credit Unions (NAFCU), the American Financial Services Association (AFSA), the Consumer Bankers Association (CBA), the Consumer Mortgage Coalition (CMC), the Housing Policy Council of the Financial Services Roundtable, the Independent Community Bankers of America (ICBA), the Real Estate Services Providers Council, Inc. (RESPRO), the National Community Reinvestment Coalition (NCRC), the National Consumer Law Center (NCLC), the National Association of Hispanic Real Estate Professionals (NAHREP), the National Association of Home Builders (NAHB), the American Land Title Association (ALTA), and the Independent Bankers Association of Texas (IBAT).

To cosign this letter, please contact Greg Davis with Congressman Rubén Hinojosa ... or Nicole Austin with Congresswoman Judy Biggert....

Sincerely,

Rubén Hinojosa Judy BiggertMember of Congress Member of Congress

*********************************************

April XX, 2008

The Honorable Roy Bernardi

Deputy Secretary

U.S. Department of Housing and Urban Development

451 Seventh Street, S.W.

Washington, DC 20410

Dear Deputy Secretary Bernardi:

We are writing to request that the Department extend from 60 to 120 days the public comment period for the proposed Real Estate Settlement Procedures Act (RESPA) rule that was published in the Federal Register on March 14, 2008 (“Proposed Rule to Simplify and Improve the Process of Obtaining Mortgage;” Docket No. FR-5180-P-01).

We appreciate your efforts to simplify RESPA disclosures and to give borrowers the information they need to make informed decisions as they shop for a mortgage. However, with its appendices and Regulatory Impact Analysis, the proposed rule is several hundred pages in length and covers a number of subjects that are beyond disclosures and have not previously been the subject of public comment. In addition, it is important to analyze the proposed rule’s interaction with state laws and with other federal laws and regulations, including the Federal Reserve Board’s proposal to amend its Truth in Lending Act (TILA) regulations.

Given the potentially far-reaching impact of RESPA regulatory changes that have been made so apparent in rulemaking proceedings over the past several years, we believe it is reasonable for us to request that the public has an additional 60 days to comment.

We appreciate your consideration of our concerns and look forward to a positive outcome on this matter.

Sincerely,