Each of the proposals drew heavy fire from the industry groups most directly affected by them. Mortgage brokers, for instance, sent HUD the vast majority of the 25,000-plus comments, and were virtually unanimously in opposition to the tougher broker-fee disclosures. Brokers were especially incensed that their own heavier disclosures would not be matched by any additional fee disclosures by mortgage bankers or depository lenders. The latter are considered "secondary market" participants under RESPA, and are not subject to disclosure requirements for loan officer compensation, according to HUD.

One broker, Julie Henderson of US Lending Co. in Redding, CA, complained that "by artificially identifying a yield-spread premium as a 'lender payment to the borrower'...you (HUD) expose just about every mortgage broker in America to class-action lawsuits." Henderson said that she "can just see a whole host of class-action plaintiffs asking (their brokers) 'where is my check from the lender?'"

The 800,000-member National Association of Realtors applauded HUD's goal of toughening and tightening good-faith estimates, but came out swinging against HUD's guaranteed mortgage packaging concept.

Calling it a "radical approach to reform," NAR said "there is not enough evidence of consumer and industry benefit to move forward" immediately with the packaging idea. NAR said its members are concerned that packaging closing costs will inevitably favor large banks and hurt smaller settlement service providers. By extending an exemption from RESPA's anti-kickback restrictions to packagers, said NAR, the guaranteed mortgage concept could both "reduce the quality of services provided (to consumers), and ultimately lead to higher closing costs."

The Mortgage Bankers Association of America and banking trade groups generally favored the packaging plan, but asked for delay or changes on the toughened good faith estimates. Consumers groups such as AARP welcomed both the guaranteed package approach and more accurate good faith estimates, but offered HUD technical suggestions for improving them.

HUD's time frame on the reforms? Officials at the agency say they would like to wrap up their reviews of the 25,000 comments late this year or early in 2003, and then issue a final rule sometime in the Spring. Between now and then, say groups opposed to the changes, look for Congress to weigh in on the issues--and possibly to block any HUD move to put the new rules into effect.