In testimony to Congress last week, the Mortgage Bankers Association of America urged lawmakers to reform the Truth-in-Lending and Real Estate Settlement Procedures acts. Among the recommendations: impose a nine-month moratorium on mortgage disclosure lawsuits.

Excerpts from the testimony by MBA president Ron J. McCord follow.

The whole process of buying and financing a home has become too complicated. A study we just recently completed with Yankelovich Partners, an independent national research firm, shows just how pervasive consumer confusion really is.

While people remembered getting a lot of information during the home lending process, more than one-third of them said they get too much to understand. Consumers want clear, understandable information, and they want it as early in the mortgage lending process as possible.

We need to empower people to make sound decisions about how much it will cost them to buy a home. We need to focus on just what it is that people- ordinary homebuyers-really need to know and when they need to know it. We need to make sure that people financing a home get information that informs, rather than confuses-information they can both understand and act on.

That's why we're here today to ask Congress for a time-out from piecemeal Respa legislation and from litigation in the courts.

The Respa-related class action suits that have been going on around the country represent to me an almost classic example of what's wrong with Respa and why it's time to reform it. Class action lawsuits like the ones we've seen lately on yield spread premiums show just how Respa has become so complicated even the regulators don't understand it.

Yield spread premiums-the compensation paid to mortgage brokers by wholesalers-have developed over the years in response to the changing marketplace. They provide an important toll for flexible pricing that makes homeownership more affordable. Thanks to the flexibility offered by these premiums, people with little cash for a down payment and closing costs can still qualify for a mortgage.

The current crop of class action lawsuits threaten to take away flexibility. That threat has come about precisely because the laws have not kept up with a complex marketplace or with the changing needs of homebuyers. I believe it is fundamentally a piece of legislation that was designed for a different era.

The broker compensation class actions are only the latest in a series of actions brought by a small bank of plaintiffs' lawyers against our industry. Previous instances have involved theories of litigation raised under Truth-in-Lending, every bit as specious as the class actions under Respa today. The Truth-in-Lending cases were possible and remain so because Truth-in-Lending is at least as complex for the industry, and as confusing to consumers, as Respa.

We could spend the rest of our working lives adding Band-Aids to an already too complex set of Respa/Truth-in-Lending rules, or we can decide that the wisest, fairest course is to begin again and once and for all get something that works for all of us.

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