Written by Loretta Salzano*

The time is now!  While we are all struggling with the impending deadline for the new GFE and HUD-1 forms as required by RESPA and Regulation X, let's not forget about an even larger change looming on the horizon.  Earlier this year the Federal Reserve Board proposed the most sweeping changes to Regulation Z in a generation.  The comment period expires on December 24, 2009.  Yes, that's correct, Christmas Eve - only a few weeks away.  Perhaps the timing couldn't be worse, but do not let the comment period expire without letting your voice be heard.  Countless times industry cries out only after a rule is finalized and the appropriate opportunity to oppose it (or revise it) has long passed.

The proposed rule (weighing in at 380 pages as published in the Federal Register) may be found at:

http://edocket.access.gpo.gov/2009/pdf/E9-18119.pdf  (closed-end)

http://edocket.access.gpo.gov/2009/pdf/E9-18121.pdf  (open-end)

There are a few issues of primary concern to the mortgage industry which include:

• the difficulty in providing the new proposed disclosures for practical technical reasons (among others);
• a more all-inclusive APR definition without a corresponding change in high-cost loan calculations (which will trigger more high-cost loans);
• the possibility of additional waiting periods to close loans;
• the prohibition on loan originator compensation based on the loan's interest rate or any loan term or condition (whether the loan originator is a mortgage broker or employee of the mortgage lender); and
• an anti-steering provision which would be difficult to implement and monitor.

We all witnessed HUD's withdrawal of its proposed RESPA rule many years ago in response to an unprecedented number of comments.  It will take an equally concerted effort of the mortgage lending industry to persuade the Federal Reserve Board to reconsider its proposed changes and their impact on an already struggling industry. 

Comments may be submitted by any of the following methods using Docket No. R-1366 (closed-end) and Docket No. R-1367 (open-end):

• Agency Web Site: https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: http://www.regulations.gov/.  Follow the instructions for submitting comments.
• E-Mail: regs.comments@federalreserve.gov.  Include the docket number in the subject line of the message.
• FAX: (202) 452-3819 or (202) 452-3102
• Mail:  Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20^th Street and Constitution Avenue, NW, Washington, DC 20551.

Now is the time to act!  Don't wait until it is too late for your voice to be heard!

Loretta Salzano is a partner at Franzén and Salzano, P.C., Attorneys at Law, 40 Technology Parkway South Suite 202, Norcross, Georgia 30092-2906, and may be reached at LSalzano@franzen-salzano.com.

* Any opinions expressed in the above article are to be construed as the author's opinion only and do not necessarily reflect those of DocMagic, Inc., including members of its Compliance Department.