?This story was intended by the Department of Housing and Ur- ban Development (HUD) to have a happy and well-informed ending. In 1974, Congress enacted the Real Estate Settlement Procedures Act ( 12 USC 2601), codified as HUD’s Regulation X in 24 CFR 3500. The ultimate goal of this aging regulation is to inform the consumer about closing costs and settlement procedures. HUD describes the act’s goal on its Web site: RESPA requires that consumers receive disclosures at vari- ous times in the transaction and outlaws kickbacks that increase the cost of settlement services. RESPA is a HUD consumer protection statute designed to help homebuyers be better shoppers in the home buying process, and is en- forced by HUD. HUD has made several attempts to have this regulation updated but met with resistance each time. The subprime meltdown created a more receptive audience in Congress to finally allow this overhaul and the major revisions that some feel are long overdue. Even the title of the final rule clearly conveys the intent of the changes: “Real Estate Settlement Procedures Act: Rule to Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs.” The proposal for changes was issued in March 2008, and the final rules were published in No- vember 2008. Some minor provisions went into effect in January 2009, but the major changes will be mandatory beginning January 1, 2010. Many compliance officers at small to mid-sized commu- nity banks across the country have long had to deal with the issues that go along with having a closing appointment for a consumer-purpose real estate–secured loan that is covered by HUD’s RESPA/Reg. X. Traditionally, the types of loans CHANGES AND CHALLENGES THE NEW By MauReen e. caRollo, cRcM i magine if you will a newlywed couple shopping for the home of their dreams. They have been saving for a down payment for as long as they can remember, even before tying the knot. For weekends on end they have been shopping tirelessly for the perfect home in their price range. Their realtor seems almost like a family mem- ber because they have spent so much time together searching for that perfect home.
