Mr. Chairman, thank you for calling this second hearing looking at HUD's proposed reforms to the Real Estate Settlement Procedures Act. I know that the proposal HUD has been working on is of great importance to consumers as well as those involved in the lending process; this oversight hearing provides an opportunity to examine carefully the likely impacts of the proposal.
I have argued for quite some time that consumers need more certainty and more transparency in the homebuying process. Any sound and balanced effort that accomplishes these goals is one to which I could lend my support.
Buying a home is the single most complicated financial transaction that most Americans will ever undertake. It can be extremely confusing and consumers often have a difficult time shopping for different loan products. Even people who considers themselves relatively financially-savvy can get bogged down in the process.
Mr. Chairman, one of the things that I am particularly glad to see is that there is interest in addressing the shortcomings of the Good Faith Estimate. As you know, there are no penalties if the GFE is grossly inaccurate and, in some cases, it is of only very limited use to homebuyers. We would do the public a great service if they had more concrete information prior to closing about how much they need to bring to the table.
I also see promise in the idea of a guaranteed mortgage package. I believe that a guarantee makes a lot of sense as long as these packages have uniformity and can be easily compared.
I welcome our witnesses today. I know that several of them have serious concerns about HUD's proposal. I am anxious to learn more about what they have to say and I hope that HUD is listening closely to their concerns.
It is important that as we proceed with this reform process, that we balance a number of concerns. We should ask ourselves: how can we promote competition in the homebuying process? How can we look out for small businesses involved in the lending process and insure that they can compete fairly? What steps should be taken to protect potentially more vulnerable borrowers in the subprime markets? And, how can we eliminate the confusing aspects of this process and enhance transparency and certainty?
With all of this in mind, I believe that all concerned parties, working together, could ultimately come up with a reform proposal that would have widespread support.
Thank you, Mr. Chairman.