Relaxed Enforcement for 120 Days ... What Does It Mean To You?

With HUD's announcement on Friday, lenders and other settlement providers are asking "What does it all mean?”  I think it means we have to remain diligent and committed to making this extraordinary change.  The effective dates remain in place; there's no waiver whatsoever for the implementation date.  I think what HUD is saying is simply, if you're working hard to become RESPA Ready and you've done your due diligence, we will meet you halfway and allow some additional time for you to get operational bugs worked out. 
 
What measurements will they use to determine if you're implementing in good faith?  HUD says the good faith determination will be based on whether we've relied on the rule and FAQs, and whether we've shown investment in and commitment to technology, training and quality control standards.  In other words, if you've taken this seriously then HUD wants to grant a bit more time to help you master the operational aspects of the new rule.
 
HUD also encouraged state enforcement agencies to follow the relaxed enforcement schedule.  But keep in mind, that these agencies or other concerns may not embrace the concept of this break in period.  It means we have to proceed from the assumption that the rule is in full force and effect on January 1.  If you take this extension of the enforcement period and keep working hard to update your processes, you'll be headed in the right direction.  If you take it as an invitation to relax your efforts ... you're missing the point.