2004 Year in Review

Manzullo hails Administration's Decision on RESPA

(WASHINGTON) House Small Business Committee Chairman Don Manzullo (R-IL) today hailed the Bush Administration for scrapping a proposed federal housing regulation that could have put thousands of small real estate settlement companies out of business while squashing competition and eventually raising costs for home buyers seeking financing.

Manzullo, who held two Small Business Committee hearings on the issue, said the proposed changes to the Real Estate Settlement Procedures Act (RESPA) unfairly gave many giant mortgage lenders the ability to bundle support services when offering home mortgages. Home buyers would have received a bundle of packaged services when seeking financing without the ability to substitute support services, such as title searching, appraisals, surveys, pest inspections, real estate and brokerage services. The large mortgage lenders would have eventually pushed the small real estate companies out of business and a grabbed a monopoly in the home-buying industry, increasing costs to home purchasers.

The U.S. Department of Housing and Urban Development (HUD) proposed the RESPA changes in July of 2002. An initial economic analysis indicated the proposed regulations would have cost small businesses between $3.5 and $5.9 billion. During the public review period, the proposal received more than 40,000 comments. The Office of Management and Budget's Office of Information and Regulatory Affairs (OIRA) was in the process of reviewing the proposal when the decision was made to scrap it.

"Today, President Bush and his administration reaffirmed their support for America's small businesses. They know that small businesses create 75 percent of all new jobs each year, and this HUD proposal would have stifled that job creation," Manzullo said. "On behalf of America's small businesses, I want to thank President Bush, former HUD Secretary Mel Martinez, acting HUD secretary Alphonso Jackson, and OIRA Administrator John Graham for their leadership in recognizing that the costs of this proposal were too great. Their decision today will allow competition to continue in the real estate settlement industry, which will keep costs down for consumers."

by  Editor, theCity1.com
March 23, 2004