After a House Small Business Committee hearing on July 1, the Department of Housing and Urban Development announced that it uould extend the comment period for the final rule of the Real Estate Settlement Procedures Act.

More than 500 letters expressing support and disapproval were mailed to HUD through Aug. 5.

Some excerpts from the comment letters follow.

Controlled Business Arrangement:

Lending institutions can already require that their settlements occur only at designated settlement agencies. Now lenders can be paid a fee for this "referral." Personally, if I can obtain a captive source of business by paying a legal "kickback", I will probably do it. But I do not see how the consumer will benefit from this H., Kendrick Sanders, American Homeowners Title Agency Inc., Fairfax, Va.

An attorney representing both borrower and seller in a purchase transaction creates an unquestionable conflict of interest. No regulatory agency or bar association would condone this arrangement, no matter what the cost savings or how many disclosures were signed the potential for conflict is too great.--Dan Romano, New York Association of Mortgage Brokers, Ozone Park, N.Y.

Controlled Business Arrangement Disclosures:

Having been a "mortgage banker"... I know that as a group, the big mortgage bankers have managed to run silently and swiftly under the ship of fair competition and have put a gaping hole in the hull. They now do business without the same regulatory constraint that smaller firms, especially brokers, are now subject to. The big bankers are laughing and dancing in the streets right now.--Michael Hall, Mutual Home Mortgage of Oregon, Lake Oswego, Ore.

I am a small business owner who is being beaten up by the "big boys" while the government holds me down. If my company ... processes a loan and can generate a small rebate, I have no problem in disclosing this to my borrower and keeping the rebate, if I feel it is justified. But my larger competition will not only keep the rebate, it is not even required to disclose it to the borrower. This is not a level playing field! Steven C. Salveson, Scheller, Hess-Yoder & Associates Inc., mortgage brokers, Hillsboro, Ore.

If a mortgage banker and a mortgage broker quote the same rate and receive a premium pricing fee, the broker must disclose this compensation as is it were a "kickback," but the banker does not. The borrower is confused and may feel that because this compensation was not disclosed, he is getting a better deal from the banker on an identical loan. --David L. Lyle, Mortgage Brokers Inc., Tucson, Ariz.

Computerized Loan Origination:

As a 30-year veteran of banking and finance, it is annoying to me that the Realtor now becomes mortgage specialist, sales person and lender counselor simply by looking at the computer screen. What a wondrous miracle that an enacted regulation has given members of the [National Association of Realtorsl all of the technical knowledge and experience it has taken me 30 years to achieve, with the stroke of a pen.--Russell T. Makara, All Service Mortgage Inc., Largo, Fla.

Computerized loan origination systems were the brainchild of huge banks for the benefit of the banks, Such arrangements limit the Information provided to the consumer. There is no clear definition of what CLO is to accomplish besides allowing some deep-pocket lenders to get business from real estate firms and paying them for so-called business. --Ed Rostami, Tri Star Mortgage, Woodland Hills, Calif.

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