Wednesday, December 30, 2009

New RESPA Changes: Timing of Enforcement

(This is Day 11 of 12 in a series called "The 12 Days of RESPA Reform" which will run until December 31st. For a full list of RESPA topics, check here.)

The revised RESPA rules that have not already gone into effect will become effective on January 1, 2010. As we announced here, however, HUD has agreed to "exercise restraint in enforcing" these provisions for the first 120-days of 2010.

What is the impact of this delay on use of the new Good Faith Estimate and HUD-1 Settlement Statement?

As of today, there should be no delay in implementation of the new forms or practices, but where there is a failure by a lender to adhere to these changes during this 120-day period, there may be some leniency in enforcement. There are still some practical considerations to be worked out, and provided a lender is exercising good faith in becoming compliant, HUD may elect not to enforce with a heavy hand.