Good Morning. I'd like to thank our witnesses - Governor Meyer from the Federal Reserve and Assistant Secretary Retsinas from HUD- for coming to testify on the Truth-in-Lending Act and the Real Estate Settlement Procedures Act. Last week, we heard from the real estate industry and consumer groups. This morning we will hear from the regulators of these federal statutes.
RESPA and TILA were passed by the Congress in the late 60's and early 70's to provide consumers with information about the home buying process. They are intended to give consumers knowledge about the fees they are paying to get into the house and how much they will be spending each month to stay in the house.
While no one finds fault with these objectives, in reality, these statutes are hurting the consumer. The consumer receives too much information, too late in the home buying process. The result is that they cannot shop for mortgage products and in the end, are often paying too much for those products. RESPA, in particular, no longer fits the 1990's business structures that can many times cut costs for consumers. The statute is a mess and must be re-written.
Last week, I raised some questions about the legal duty of a mortgage broker to a consumer. I see a lot of problems with the current role of a mortgage broker and hope that these are addressed in any reform of RESPA. I also have some questions for HUD on the regulation of this industry.
Currently, HUD and the Federal Reserve are working on simplifying the disclosures that consumers receive when buying a house. Their work on legislative recommendations should begin at the end of this month. I look forward to hearing when the Congress can expect a report. In addition, a working group is looking at RESPA reform.
I am pleased that all these groups and the federal agencies are
working towards a common goal of making things easier and less costly for
consumers. I look forward to seeing what the parties have agreed upon
next year so that we can pass legislation to give consumers information and
choices when buying a home.
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