Homebuyer Bill of Rights
The disclosure requirements under RESPA regulations have not been substantially revised in over a decade.
RESPA’s pledge of reduced settlement and closing costs has yet to be fulfilled.
Reforming RESPA now is the right thing to do. The Administration unveiled a set of principles called the Homebuyer Bill of Rights that will from now on guide the home settlement process. These principles are consumer driven and rooted in the homebuyer’s right to know. They stand as the centerpiece of our efforts to empower would-be homeowners - and existing homeowners looking to refinance - through access to mortgage finance information.
The Homebuyer Bill of Rights specifies that:
- Homebuyers have the right to receive settlement cost information early in the process, allowing them to shop for the mortgage product and settlement services that best meet their needs;
- Homebuyers have the right to benefit from new products, competition, and technological innovations that could lower settlement costs;
- Homebuyers have the right to simplified disclosure and access to better borrower education;
- Homebuyers have the right to know they are protected through vigorous RESPA enforcement and a level playing field for all industry providers.
With these principles to guide us, we undertook a major reform of the regulatory requirements under RESPA.
After months of consultations with industry groups, consumer advocates, and federal agencies, including an initial review by the Office of Management and Budget (OMB), HUD published its reform proposal for public comment on July 29. The comment period is open until October 28, 2002.
It’s believed that this proposal can potentially reduce closing costs by an average of $700 per closing. This kind of savings will allow many more Americans currently priced out of the home buying market to buy a home. We also expect our proposal to promote innovation in the marketplace and inspire greater public confidence in the mortgage lending industry.