I would like to commend Senators Faircloth and Mack for convening today's hearing to discuss the Real Estate Settlement Procedures Act and the Truth in Lending Act. Since their enactment, both statutes have been effective in providing consumers with disclosures that have allowed them to make informed decisions about mortgage financing and the real estate settlement process. In addition, these statutes have gone a long way in reducing a number of abusive practices in mortgage lending and settlement that cost consumers money. As such, I believe that the basic intent of these statutes has been fulfilled, and that consumers have realized positive benefits.
Nevertheless, anyone who has ever purchased a home would suggest that much more could be done to simplify the disclosure process and reduce the amount of paperwork that consumers must sign. In a recent report, it was documented that on average, consumers must sign 50 papers at a typical closing. Certainly, this maze of paperwork has confused and frustrated many home buyers, and has perhaps compromised the effectiveness of RESPA and TILA. In light of these concerns, I strongly support the efforts of consumer groups, industry, the federal regulators and members of this Committee to improve RESPA and TILA and to eliminate much of the confusion that consumers face when purchasing a home. Moreover, in reforming RESPA and TILA, Congress should look to the realities of today's home buying market, including the fact that certain transactions may increasingly be conducted through the Internet, and we should legislate in contemplation of this reality.
Congress must also resolve existing ambiguities in RESPA regarding referral fees, and should enact reforms clarifying the obligations of industry and the rights of consumers. However, I do not believe that industry proposals to issue a moratorium on class-action lawsuits is the proper means of addressing this issue, and only provides a "band-aid" solution to a much larger problem. Instead, I believe we should focus on reaching a long- term solution that protects consumers and eliminates the need for litigation in the future.
As we look toward reforming RESPA and TILA, we should
be mindful of the fact that a home purchase represents the
largest investment that most Americans ever make. As such, I
believe this Committee has an obligation to vigorously pursue
reforms that will put consumers in the best position to make
informed decisions about home buying. I look forward to
working with the witnesses at today's hearing, in addition to the
federal regulators, and my colleagues on this Committee to
achieve this outcome and enable more Americans to become
home owners.
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