I just submitted a comment o HUD in response to Document ID: HUD-2010-0044-0001: FR–5352–A–01 Real Estate Settlement Procedures Act (RESPA): Strengthening and Clarifying RESPAs (Required Use) Prohibition.
“Through this Advance Notice of Proposed Rulemaking (ANPR), HUD commences the process of initiating rulemaking directed to strengthening and clarifying the prohibition against the “required use” of affiliated settlement service providers in residential mortgage transactions under section 8 of RESPA. HUD has received complaints that some homebuyers are committing to use a builder’s affiliated mortgage lender in exchange for construction discounts or discounted upgrades, without sufficient time to research their contracts or to comparison shop. The purpose of this ANPR is to solicit information that can be used to inform any future revision or clarification of the regulatory definition of the “required use” of affiliated settlement service providers in residential mortgage transactions.
With this ANPR, HUD seeks comment from an array of sources with experience or knowledge of affiliated business arrangements in residential mortgage transactions. HUD also welcomes comment on actions in addition or as an alternative to rulemaking that would better address concerns with affiliated business arrangements in residential mortgage transactions.”
MY COMMENT SUBMITTED TO HUD:
It’s about time this problem was addressed. When I purchased my own home in 2007 from new home builder Polygon Homes I had to double the earnest money to be able to use my own lender. The special arrangement they had with Seattle Mortgage, the guy in the office (which was a house on site set up as a model for the site agents and the lender) clearly was not trying to get the best deal for me, didn’t return calls very well, and I had no reason to trust him. An independent mortgage broker was able to get me an interest rate of about 2 points (!) lower and provided great service. I trusted he was looking out for my best interests and was going to see my transaction through to the end.
I think it’s disgusting that this has been allowed to continue for so long, there were tons of complaints from the other buyers here about how they were treated by this guy – and they are paying a lot more for their house than they should be especially now that they all are worth less than what we paid. I just absolutely refused to kowtow to their demands and it cost me good money out of my own pocket to stand up for my own rights and what I believed to be right for others.
