New real estate lending disclosure rules should be proposed by May and made final in late fall, according to Sarah Rosen, special assistant to the assistant secretary of housing at the Department of Housing and Urban Development.
"We'd all love to have it done faster," said Ms. Rosen, a member of the committee crafting changes to Real Estate Settlement Procedures Act rules. "But we're pleased that the group seems to be progressing well. There seems to be a genuine commitment to getting something done."
The committee's second of five planned meetings was held last week, with the next slated for Feb. 22. The group, made up of representatives from trade associations, regulatory agencies, and consumer groups, was formed by HUD to answer several key questions about real estate lending disclosures.
One subject up for debate is whether a mortgage broker must tell borrowers about fees it receives from a bank for the transaction, called indirect fees. Another issue is when to classify a loan as a "secondary- market transaction," thus exempting it from Respa.
Also at issue is whether lenders should be allowed to offer discounts to mortgage brokers that agree to buy a certain amount of loans in the future.
Committee member Glenn Gimble, a Respa specialist with America's Community Bankers, said debate on whether indirect fees are permissible in any form under the act dominated last week's meeting.
Consumer groups, banking officials and nonbank representatives presented their cases, giving anecdotal examples in which indirect fees had either done damage or proved helpful, Ms. Rosen said.
Mr. Gimble said no consensus was reached on the permissibility of indirect fees. He added that the committee members had signed agreements not to discuss opinions presented by the group.
"It was a fairly successful two days," Mr. Gimble said. "Through the various presentations and discussions, the issues that we have to cover are starting to become clear."
Assuming some indirect fees are found permissible, Ms. Rosen said the group could then move on to questions about secondary market transactions and disclosures.
