Mortgage bankers and real estate firms agree to disagree on the provisions of the Real Estate Settlement Procedures Act, but the adversaries have acknowledged that the fate of the four embattled provisions may be greatly influenced by Department of Housing and Urban Development General Counsel-appointee Nelson Diaz.

Diaz sailed through the Senate Banking Committee nomination hearing Aug. 4, passing with a unanimous vote, and full Senate confirmation was expected before Congress broke for the August recess.

Once appointed, he, HUD's assistant secretary for housing, deputy secretary of single family housing, the assistant secretary for economic affairs and others will begin a lengthy review before they decide whether to keep, throw out or save portions of the final rule. HUD spokeswoman Angelina Ornelas said the process could take months and that Diaz, if appointed, would be a central figure in those decisions.

Diaz served most recently as a trial judge in the 1st Judicial District of Pennsylvania's Common Pleas Court in Philadelphia and was the first Hispanic judge in that court. He was appointed to that position by former Gov. Richard Thornburgh. The Harlem, N.Y., native also served as a special assistant to former Vice President Walter Mondale in 1977.

Part of what has both mortgage bankers and real estate folks curious is that neither group knows much about Diaz.

"I don't know what his leanings are," said one banking industry lobbyist, "but if he's liberal and concerned about the consumer, then chances are probably good that the controlled business arrangement ~kickbacks' provision will be eliminated. If he's more moderate or conservative, then it might stay."

Real estate firms agreed.

"The general counsel always has significant influence," said Sally Sciacca, a government relations expert with the National Association of Realtors. "But I don't know if he'll be as strident as [former General Counsel Francis] Keating. And he'll probably be helped out by the HUD policy people, like Michael Stegman and Fred Eggars from the assistant secretary for economic affairs office."

Diaz and HUD's policy-makers will have their hands full. Nearly 40 speakers representing a wide range of mortgage banking firms, real estate and law firms, title agencies and consumer groups were scheduled to slam or support the provisions during a special hearing Aug. 6. But the hearing, arranged after a strong trade group-led outcry for additional discussion, didn't provide the only information HUD will review. More than 500 letters have also poured into HUD during the last month.

Form letters dominated the Respa comments, and most of those letters represented the mortgage bankers' position by voicing fierce opposition to Regulation X. Some companies, mostly of small-town mortgage brokerages and title agencies, also disputed the provisions. Real estate firms in support of the provisions were few.

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