- The Washington Times - Monday, March 22, 2004

ASSOCIATED PRESS

Federal housing officials are withdrawing a proposal they said could have saved consumers hundreds of dollars on mortgage closing costs, the Bush administration’s housing chief said yesterday.

A “significant number of questions” have been raised about the proposed changes to the Real Estate Settlement Procedures Act, acting Housing and Urban Development Secretary Alphonso Jackson said in a letter to the Office of Management and Budget.

Mr. Jackson said numerous industry groups and members of Congress have complained about not having enough time to comment on the proposal. He said he intended to resubmit the plan, but offered no timetable.

The HUD proposal, in the works for two years and submitted to the OMB in December, would have encouraged lenders to offer one price to cover all closing costs, such as broker fees, title searches and appraisals. Currently, the costs are itemized.

HUD officials said many home buyers were confused by all the numbers and that offering one price for closing costs would make it easier to shop around.

According to the Mortgage Bankers Association of America, closing costs average about $2,000 per transaction, though that varies widely depending on the price and condition of the house, the amount of the loan and other factors.

The HUD had estimated last year that home buyers could save up to half the average closing cost if the changes were implemented.

But critics, led by Sen. Richard C. Shelby, Alabama Republican and chairman of the Senate Banking, Housing and Urban Affairs Committee, said the proposed changes could lead to lenders hiding fees from consumers.

Mr. Jackson was nominated by President Bush in December to replace Mel Martinez, who stepped down from the HUD job to run for a Senate seat in Florida. Mr. Jackson has yet to be confirmed by the Senate.

The withdrawal of the rule had nothing to do with his pending nomination in the Senate, Mr. Jackson said.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide