Housing Secretary Andrew Cuomo is committed to introducing long-awaited mortgage lending guidelines by the beginning of 1998, he told American Banker Monday.
"Mortgage bankers want regulation because it means clarification-and the Department of Housing has a history of floundering on the issue," Mr. Cuomo said.
The Department of Housing and Urban Development has been roundly criticized by the housing industry for its inability to provide clear lending guidelines, its inefficiency at enforcing rules, and its sluggishat way of responding to industry needs.
Mr. Cuomo vowed that HUD will "clean up its act" and improve a reputation tarnished by "decades of lack of attention."
HUD is transforming itself from an enforcer and regulator to an advocate and partner with the housing industry, Mr. Cuomo said.
Mr. Cuomo spoke following a well-received speech at the Mortgage Bankers Association of America's annual conference here. Mr. Cuomo promised to create a partnership between the department and mortgage bankers that will help raise American homeownership to a record level.
The secretary promised monthly meetings between HUD senior staff and MBA executives to cement this partnership.
Among other things, he pledged to: update internal technology; develop universal origination software that meshes with Fannie Mae, Freddie Mac, and private mortgage insurer programs; infuse the agency with new talent; make the FHA program work more like Fannie Mae's; centralize HUD's 81 offices into four homeownership centers; establish eight multifamily centers; and empower lenders to issue insurance certificates.
The MBA is "the most powerful advocate of and builder of housing," Mr. Cuomo told the crowd of more than 1,000. "And HUD wants to be your spokesperson, your advocate. ... We want to work for you."
Mr. Cuomo also promised lenders that "there would be a fundamental overhaul" of the Real Estate Settlement Procedures Act, or Respa, and that a bill would be before Congress by the beginning of next year. Lenders have begged HUD for clarification of the act, in the wake of a wave of class actions over fees.
He also stressed that lending to minorities and in inner cities are two areas where mortgage bankers can "do good, while doing well" financially.
Mortgage bankers and brokers greeted Mr. Cuomo's words warmly. "He said what this industry wanted to hear," said Warren Lasko, outgoing MBA executive vice president. "I'm pleased that he's willing to talk massive Respa reform."
Ron McCord, outgoing MBA president and president of American Mortgage and Investment Co., Oklahoma City, said the technological initiatives were important to mortgage bankers and that the future of HUD and MBA bankers looked bright.
"We're excited about Mr. Cuomo's enthusiasm," Mr. McCord said. "I think the best years are ahead of us."