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Date: 9/16/2008
Authors: Jessica Holzer, Dow Jones Newswires

News Bite

US Lawmakers Criticize HUD Proposal On Mortgage Disclosure

House lawmakers and housing industry representatives lambasted a proposed rule by the Department of Housing and Urban Development governing the real estate settlement process in a hearing Tuesday. The proposed rule aims to reform the Real Estate Settlement Procedures Act, or RESPA, by strengthening disclosures for consumers on mortgage terms and settlement costs. But it has come under heavy fire from more than half the members of the House, who argued in a letter to HUD last month that it would cause confusion for consumers and needlessly burden small businesses. Ten industry trade groups also raised serious concerns with the rule in a letter to the White House Office of Management and Budget, or OMB, in July.

A HUD spokesman declined to comment immediately. HUD Secretary Steve Preston last month sent the rule to the OMB for final clearance, despite opposition from lawmakers and a host of industry groups. At Tuesday's hearing, representatives from the housing industry argued that HUD should withdraw its regulation and work with the Federal Reserve on a joint rule ensuring that RESPA and the Fed's Truth in Lending Act mortgage disclosures are consistent. The Fed also declined to appear before the panel, citing its unwillingness to criticize another federal agency, according to Watt.

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