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Just How User Friendly Is RESPA Now?

HUD's latest rulemaking delves deeper into bank holding companies, defined as controlled business arrangements for purposes of RESPA, and continues the HUD directed forced march away from customer service even while CRA and fair lending emphasize the importance of customer service.

Just how helpful can bank staff be when, before even telling the customer the name of the bank's mortgage lending affiliate, the customer must read and sign a form explaining the relationship between the companies? Where is the customer service in the midst of all these disclosures? Most important, where is the attention to what the customer wants and needs?

The problem with HUD's new rule is that it is designed for enforcement but not for consumer service. The notice and the way it must be provided only serve to build a barrier between the lender and the consumer. The form is designed to build suspicion and discomfort with the lender and the service provider.

Clearly there are occasions when the trust a consumer may place in the chosen lender may be misplaced, making the consumer vulnerable to unconscionable business practices of the chosen lender. However, it is more often the case that a bank is in a position to give good advice to the consumer. HUD's approach is designed to cause mistrust when trust and the help the bank can provide are important to the bank and the customer.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 13, 8/96

First published on 08/01/1996

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