With more than 60 investigations into alleged illegal kickbacks in the works, Assistant Secretary John Weicher said last week that enforcement of the Real Estate Settlement Procedures Act will continue to be a "high priority" at the Department of Housing and Urban Development.

But a leading regulatory attorney, Phillip Schulman of Kirkpatrick & Lockhart Nicholson Graham, maintained that HUD's stepped up RESPA efforts are misplaced. The government, the housing business and home buyers all would be better served if federal regulators did a little more teaching and a little less policing.

Both men spoke at the Real Estate Service Providers Council's annual conference in Washington, where Schulman, who once worked at HUD, said lenders "need more guidance, not more police actions."

"It's not fair to use enforcement as a way to teach you what HUD thinks the rules are," he said.

On March 21, HUD announced two settlements, in the Tulsa area, under the 1974 law involving what it said were illegal affiliated business arrangements and profit sharing between builders, real estate brokers and title companies.

Those agreements followed one a month earlier alleging inaccurate settlement states, and Schulman predicted an even more rapid fire pace in the coming months.

"I fear one settlement a week or every other week," he told a conference session.

To hear Weicher tell it, the lawyer may be right.

"We view RESPA enforcement as an important part of our mission," the HUD official said. "It continues to be a high priority."

Indeed, at a time when HUD's overall staffing has declined, the department has tripled its enforcement staff, adding 15 people to what was a five-person unit.

Last year, the RESPA and Interstate Land Sales Division cleared 1,200 complaints, more than double the workload handled in 2002, according to the lame duck Federal Housing Commissioner, who has announced his resignation and will leave HUD on April 30.

Currently, he added, the unit has "more than 60 on-going investigations" into supposed violations under Sections 4 and 8 of the now 31-year-old law, a law even HUD believes is woefully outdated and has been trying to re-write for the better part of a decade.

Sec. 4 prescribes the use of the uniform "HUD-1" settlement statement in all federally related mortgage transactions and requires the settlement agent to provide a copy of the completed form to the borrower, seller and lender.

Sec. 8 bans settlement service providers from paying fees to others in the transactions in return for steering business their way. However, the prohibitions against kickbacks and unearned fees do not apply to affiliated business arrangements as long as they are disclosed and the borrower is not required to use a particular provider.

Published: April 13, 2005

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.