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HUDRulemakingHUD-2010-0044

FR–5352–A–01 Real Estate Settlement Procedures Act (RESPA): Strengthening and Clarifying RESPAs (Required Use) Prohibition

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Mortgage Bankers Association filings
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Mortgage Bankers Association filed 2 comments on this docket between Jun 10, 2010 and Sep 7, 2010. 72 other organizations filed here. The comment window closed 5809d ago.

What Mortgage Bankers Association filed (2)

Sep 7, 2010· Comment Submitted by Andrew Szalay, Mortgage Bankers Association· HUD-2010-0044-1076

Please see the attached comments from the Mortgage Bankers Association (MBA).

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Jun 10, 2010· Comment Submitted by Scott Drescher, Dallas Mortgage Bankers Association· HUD-2010-0044-0312

I applaud you for going back and putting the required use provisions in place. The consumer is greatly harmed by the "incentive penalty" clauses in homebuilders' contracts. I call it "incentive penalty" because the builder offers an incentive of thousands of dollars involved in the cost of the home to steer the buyer to the in-house lender, calling the cost reduction an "incentive"; once the buyer has signed the contract and goes to get the loan, he discovers he is losing almost as much if he chooses a market lender instead of the builder's lender (the "penalty" for leaving the "incentvie"). Consumers need a strong, unequivocal rule in place such as the one you proposed in 2008 but retracted in 2009. I complained repeatedly to HUD about it for years and even went so far as to take a complete, closed loan file that showed unmistakenly that the builder used a bait-and-switch tactic to get the contract signed and the buyer couldn't get the builder's mortgage company to be anywhere near competetive after the contract was signed, the house was built, and the time to lock the rate came along. Please don't let the builders bully you. They should make their profit from building homes, not on the backs of consumers through inflated interest rates that earn them big fees in the secondary market resales of the closed loans. There should only be savings that come from the cost or rate on the service -- not crossed over to the home price. Home discounts should be for home products; if the builder wishes to give an incentive on the use of the mortgage or title company, the incentives should be only in rate or closing costs reduced directly by the lender, not paid by the builder, not reduced in the home price. There should be no fees reduced on one product for using a related company's product, plain and simple. The builders will whine that it will hurt their profits. That is proof positive that they are making too much off the mortgages! Thanks.

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