[Congressional Record (Bound Edition), Volume 150 (2004), Part 1]
[Extensions of Remarks]
[Pages 107-108]
[From the U.S. Government Publishing Office, www.gpo.gov]




RULE PROPOSED BY THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT DURING 
                          CONGRESSIONAL RECESS

                                 ______
                                 

                        HON. MARILYN N. MUSGRAVE

                              of colorado

                    in the house of representatives

                       Tuesday, January 20, 2004

  Mrs. MUSGRAVE. Mr. Speaker, in March 2003, the House Small Business 
Committee convened a hearing to review a prospective rule from the 
Department of Housing and Urban Development (HUD). This rule was 
intended to alter the Real Estate Settlement Procedures Act.
  During the past 2 years, HUD has been working to simplify the real 
estate settlement process. Their goal is to produce a uniform packaged 
pricing concept for consumers that incorporates all pricing elements 
including home inspections, title insurance, and interest rates.
  During the March 2003 hearing, HUD officials testified to the Small 
Business Committee regarding different elements of this initially 
proposed rule. Much attention focused on the inadequacy of the economic 
impact study contained within the rule, particularly with respect to 
the effect on small businesses nationwide. After fielding questions 
from nearly every Member seated on the Committee, HUD agreed to give 
additional consideration and possible revision to their prospective 
rule.
  It became evident during review of the initially proposed rule that 
it would be a step in the wrong direction. Consequently, it had no 
support from the real estate and mortgage industries, as well as little 
support from consumer advocacy groups.
  During the process leading up to last spring's hearing, the 
Department of Housing and Urban Development was forthcoming about 
details of the rule prior to last spring's hearing. But since then, HUD 
has been virtually silent about changes, despite receiving tens-of-
thousands of pages of comments during the extended review period.
  Mr. Speaker, it troubles me that, as of late, HUD has been 
stonewalling Congressional inquiries by not responding to suggested 
comments, as indicated, and to questions asked during the hearing.
  Surprisingly during the recent Congressional winter recess, and 
without notice to Congress regarding the nature of any changes, HUD 
submitted their final rule to the President's Office of Management and 
Budget in December 2003.
  Now, executive privilege prevents Congress and the public from 
reviewing the final rule. While it is HUD's prerogative to forward this 
rule during Congress' recess, this instance clearly circumvents the 
intent of congressional oversight for departmental and agency 
rulemaking.
  Depending on the contents of this final rule, the largest of the 
market lenders may seek to establish exclusive relationships with real 
estate service providers, such as home inspectors, title insurers, 
mortgage brokers, or real estate agents.
  Home inspectors, for instance, would be forced to accept below market 
pricing for their inspection services, or face difficulty finding work.
  Furthermore, large and small businesses alike would spend millions of 
dollars to change forms and reformat their disclosures, losing valuable 
time being retrained to present a product they already produce 
ethically and efficiently. This does not make sense.
  Ultimately, consumers would be left with limited choices and higher 
prices. Smaller businesses unable to compete, due to a lack of 
sufficient resources, would be forced to close their doors.
  Mr. Speaker, I encourage OMB to make the right decision on this 
delicate matter and to operate transparently and deliberatively when 
considering rule proposals. The opportunity to purchase a home through 
easy and equitable transactions may be lost for many, should this final 
rule become published.

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