How's this for an idea, instead of spending millions on RESPA Cops trained to assume an aggressive posture and sniff out lender violations, why not open up a helpdesk and work with lenders who want to make things better by bending the rules? That's the new idea coming out of the Department of Housing and Urban Development (HUD), according to a recent story carried by BrokerUniverse newsletter.
I think it's a great idea, although a have a few reservations.
First, and the article didn't suggest that the agency was planning on diverting any funds already allocated to enforcement, you gotta have the RESPA Cops to deal with the people who think they're above the law. Secondly, you really need to have someone on staff that understands how to run such a program. Government hasn't presented any shining examples of its ability to create innovative new solutions that depart, in any degree, from the bipartisan regulations Congress manages to get squeezed out of our bicameral system.
Take the IRS, for example. Though years behind the trend, it is very nice to be able to get tax forms online, but if you have ever asked a question of this agency, you've heard the standard disclaimer. It appears that the IRS isn't qualified to give tax advice.
But HUD General Counsel Keith Gottfried hopes his agency will be able to not only offer useful advice, but also guarantee lenders that if they do bend the rules they won't suffer if the lender is "trying to make the homebuying process more transparent and less burdensome," according to the BrokerUniverse story.
Will it work? I'd rather see wholesale changes in RESPA than a system through which any lender can operate any way it wants as long as it seems to be trying to "do the right thing." I can see the workload in this department becoming unmanageable in short order. Remember how many comments HUD got last time it tried to change RESPA?
But it's still a bold plan. You gotta hand it to Gottfried for that.