Mr. Richard Hauser
General Counsel
Department of Housing and Urban Development
Robert C. Weaver Federal Building
451 Seventh Street, S.W.
Washington, D.C. 20410
Dear Mr. Hauser:
Thank you for meeting with representatives
of our groups to discuss yield spread premiums and the potential impact of
the Culpepper v. Irwin Mortgage decision on consumers and the mortgage lending
industry, as well as other issues related to RESPA and TILA. The course of
action that HUD decides to follow regarding the Culpepper decision will have
a substantial effect on consumers across the country.
We welcome your assurance that HUD
will invite our input on any specific measures HUD considers in relation
to this case. We believe that it is vital to consumer interests that any
action HUD takes be the result of an official review that includes a public
comment period. As you know, HUD's 1999 policy statement was mandated by
Congress (H.R. Conf. Rep. No. 105-769, 105th Con., 2d Sess. 260 (1998))(FY
1999 HUD Appropriations Act), with the expectation that HUD would "work
with representatives of industry, Federal agencies, consumer groups, and
other interested parties," and with a specific time frame by which the
clarification must occur. Therefore, we believe that HUD should not, after-the-fact,
unilaterally amend its policy statement on yield spread premiums.
Moreover, it is our understanding
that, in light of the Culpepper decision, some lenders have requested that
HUD amend its policy statement to provide retroactive legal immunity. It
is our view that it would be totally inappropriate to provide retroactive
immunity to lenders who have knowingly ignored their legal obligations under
RESPA.
We also welcome your interest in
discussing broader improvements to the mortgage loan process. The extensive
review of RESPA and TILA conducted in 1998 by HUD and the Federal Reserve
Board produced solid recommendations for improvements. We continue to support
these recommendations as the starting point for any discussion of changes
to RESPA and TILA. As you requested, please find enclosed a copy of the testimony
of a number of consumer organizations on the HUD/Federal Reserve joint recommendations.
Sincerely,
Martin Corry
Director of Federal Affairs
AARP
Travis Plunkett
Legislative Director
Consumer Federation of America
Ira Rheingold
Executive Director
National Association of Consumer Advocates
Margot Saunders
Managing Attorney
National Consumer Law Center
Brad Scriber
Housing Coordinator
Consumer Federation of America
and NCLC