On Nov. 10, 2008 - HUD announced it would now require lenders and mortgage brokers to provide consumers with a standard three page Good Faith Estimate (GFE) that discloses key loan terms and closing costs. HUD estimates its new regulation, one that has been hotly contested on both sides, will save consumers about $700 at the closing table.

On December 19, 2008 – The National Association of Mortgage Brokers (NAMB) filed a lawsuit against the U.S. Department of Housing and Urban Development (HUD) after it recently issued the Real Estate Settlement Procedures Act (RESPA) Final Rule on November 17, 2008. NAMB, with the support of Baker & Hostetler LLP and the Federal Policy Group, argues that the Final Rule is in violation of law, finalized on a flawed consumer testing methodology, and will have a detrimental impact on small businesses consequently having a negative affect on consumers.

The lawsuit against HUD states that the Final Rule is "arbitrary and capricious," contrary to the intent of Congress, and fails to offer any rational reasons for its rejection of alternative approaches. The Final Rule discriminates against mortgage brokers with the required broker-only disclosure of yield spread premium (YSP), placing them at a permanent disadvantage in the marketplace. HUD has also disregarded numerous federal and private sector studies providing evidence that different origination channels disclosing differently confuses consumers, and will often times cause them to choose a more expensive mortgage product. In a letter to former HUD Secretary Alphonso Jackson, Congress advocated for better transparency in the disclosure of loan information to prevent consumer confusion.


Read More Here:
http://www.namb.org/namb/NewsBot.asp...SnID=132443327

Copy of Lawsuit Filed:
https://www.namb.org/images/namb/Gov...2008-12-19.pdf