April 10, 2008

General Comment: Regulations Division

Office of General Counsel

Department of Housing and Urban Development

451 Seventh St., SW., Room 10276

Washington, D.C. 20410-0001

Re: Real Estate Settlement Procedures Act (RESPA):

Proposed Rule to Simplify and Improve the Process of Obtaining Mortgages
and

Reduce Consumer Settlement Costs, 08-01015 \[FR-5180-P-01;
RIN2502-AI61\]

Dear Secretary Jackson:

While there is no doubt that some form of reform is needed, as title
insurance industry professionals, we are concerned that many of the
provisions of the proposed rule fall far short of the intended mark.
Instead of simplifying and improving the process, we feel that this
proposal would actually create more paperwork and more confusion for the
consumer. It is also our belief that this proposal will increase
settlement costs to the consumer rather than reduce them.

The restructured Good Faith Estimate (GFE) is an example of increased
paperwork and confusion. The proposed form is now four (4) pages in
length and contains so much information, that the form is not easier to
understand nor will it be simpler to prepare. It also does not provide
for a direct comparison of costs with the HUD 1/1A.

The HUD 1/1A forms have been industry standard forms for many, many
years. While they are not perfect, they are familiar to all but the
newest of home buyers. We believe a better solution would be to
eliminate the GFE altogether and require the lender to provide the
consumer with a Preliminary HUD-1/1A at the time of loan application.
Further, we would recommend that the consumer be provided with a Final
HUD 1/1A seventy-two (72) hours prior to closing. Moving to the use of a
preliminary HUD 1/1A would 1. familiarize the buyer with the HUD 1/1A
form so that closing is not the first time they are seeing it and 2.
make a direct comparison of the preliminary costs and final costs much
easier to perform.

Requiring the delivery of Final HUD 1/1A seventy-two (72) hours before
closing would give the consumer ample time to study the final closings
costs, compare them with the lender\'s proposed costs and question any
differences between the two. There would be time for the consumer and
the lender to discuss any differences and come to some reconciliation
between the preliminary HUD 1/1A and the Final HUD 1/1A. Leaving this
discussion until the consumer is at the closing table is far to late in
the process for the consumer to have the opportunity to make any change
without negatively impacting their transaction.

Another benefit of using a preliminary HUD 1/1A instead of a GFE is that
there would then be no need to modify the current HUD 1/1A. Modifying
the HUD 1/1A form would require that all Title/Settlement Agents incur
costs to update software, costs which would be passed onto the consumer
in the form of increased closing fees. Keeping the HUD 1/1A as is would
eliminate the need to incur this cost.

We are also concerned about the proposal to require that the
Agent/Underwriter premium split be shown on the HUD-1/1A. This is
totally irrelevant to the consumer, especially in a market where the
premium is based off of a State filed rate. No other company in the
insurance industry is required to show this split. The consumer has no
negotiating power to recoup any of the premium paid to either party
anyway so why should they care how good of a negotiator their agent is
with the underwriter? The only thing that will come out of this is that
agents will run around looking for as many HUD-1/1A\'s from other
transactions as they can gather up to see what premium split their
competitors are getting so they can then negotiate a more favorable
split for themselves.

The area that poses the greatest concern to us is the creation of the
closing script. This is a nightmare scenario for the Title/Settlement
Agent for the following reasons:

1.  It is completely unrealistic for the Title/Settlement Agent to
    prepare this prior to closing without first receiving the complete
    closing package from the Lender/Mortgage Broker along with the GFE.

2.  The Title/Settlement Agent can\'t be expected to be able to explain
    why the Final HUD-1/1A and the GFE do not match when the
    Title/Settlement Agent was not party to the conversations between
    the Lender/Mortgage Broker and the consumer, nor were they part of
    the thought process that went into the GFE\'s preparation.

3.  Lender/Mortgage Broker should know prior to closing if they are out
    of tolerance with the GFE. After all, they prepared the GFE and they
    are the ones that supply the final, actual loan charges to the
    Title/Settlement Agent. The Lender/Mortgage Broker should have
    already made this determination and should have already addressed
    any out of tolerance items with the consumer prior to closing.

4.  How is a Title/Settlement Agent supposed to handle an out of
    tolerance item? The only option would be to halt the closing until
    such time as the Lender/Mortgage Broker and the consumer can
    reconcile. The Title/Settlement Agent can not be expected to proceed
    with a closing that would be in violation of the regulation. In a
    table funding area, this will result in great inconvenience to the
    consumer as closings will be delayed at the last possible minute,
    likely resulting in increased costs to the consumer (i.e. moving
    costs, redraw fees, cancelled closing fees, etc.).

5.  How do you read the closing script to consumers who do not attend a
    face to face closing (i.e. escrow closings, mail away closings,
    etc.)

6.  The preparation of the closing script by the Title/Settlement Agent
    will result in a significant increase in the time needed to prepare
    for a closing, which will not even begin to start until the full
    closing package and GFE are received by the Title/Settlement Agent.
    This will result in delays to the consumer if the package is not
    received at least 24 hours prior to closing.

7.  The additional preparation time, the reading of the closing script,
    the additional training of staff that the script will require and
    the upgraded software needed to implement the closing script will
    significantly increase costs to the Title/Settlement Agent which
    will ultimately mean a significantly increased settlement cost to
    the consumer, likely upwards of \$200 a transaction.

8.  The closing script preparation and explanation by the
    Title/Settlement Agent crosses the line into violation of State laws
    regarding the unauthorized practice of law. The reconciliation of
    the GFE and the HUD 1/1A should be a Lender/Mortgage Broker
    responsibility and should be done seventy-two (72) hours prior to
    closing.

> We recommend that you seek approval to put teeth into the requirement
> to have a Final HUD-1/1A to the consumer seventy-two (72) hours prior
> to closing. The twenty-four (24) hour rule already exists but is not
> enforced. Because of this, it is common practice for the
> Lender/Mortgage Broker to get the closing package to the
> Title/Settlement Agent mere hours and sometimes mere minutes prior to
> closing. Under these conditions, there is no possible way for the
> Title/Settlement Agent to be able to prepare any proposed closing
> script and then provide a high level of customer service to the
> consumer.

Thank you for allowing us the opportunity to share our thoughts with
you. Again, we believe that the proposal in it\'s current form falls far
short of its intention to simplify and improve the mortgage process and
reduce consumer costs. It is our hope that this proposal does not pass
as written.

Sincerely,

M/I Title Agency, Ltd.

TransOhio Residential Title Agency, Ltd. TransOhio Residential Title
Agency, Ltd.

Danny D. Gritton Maria White

Danny D. Gritton, Vice President Maria White, Asst. Vice President