The Realty Alliance Supports 'Two Package' System to Give Home Buyers More Choices in Lending, Closing Services.

Business Editors/Real Estate Writers

DALLAS--(BUSINESS WIRE)--Sept. 11, 2003

National Trade Group Urges HUD Secretary and Committee Chairmen to

Take "a Good Hard Look" at How to Best Serve Consumers

The Realty Alliance, a national trade association whose membership comprises more than 75,000 real estate professionals, has contacted Department of Housing and Urban Development (HUD) Secretary Mel Martinez to support what is known as the "Two Package" system. The Two Package system would provide open competition in the marketplace by allowing both lenders and non-lenders to offer guaranteed settlement services packages to consumers.

HUD's 2002 proposed Real Estate Settlement Procedures Act (RESPA) rule proposed a "Single Package" system that would have limited "packaging" to lenders.

This week, The Realty Alliance also expressed its support for the Two Package system in letters to U.S. Senate Banking Committee Chairman Richard C. Shelby (R-AL) and House Financial Services Committee Chairman Michael Oxley (R-OH), providing them with background information developed by the Real Estate Services Providers Council Inc. (RESPRO) on how the Two Package system would give consumers more choice in closing and title service packages.

"We believe HUD's Single Package proposal is flawed because it prevents non-lenders such as real estate brokers, home builders and title companies from offering consumers settlement service packages in competition with lenders," said Charles McKee, president and CEO of The Realty Alliance, whose membership supports the philosophy of "one-stop shopping."

"The Realty Alliance," McKee added, "has participated in various studies over the past few years where we've taken a good hard look at one-stop shopping and how we can best serve consumers." From those studies, he said, the organization's membership has concluded that the Two Package system would yield the widest choices and the greatest benefits for consumers throughout the nation.

Specifically, The Realty Alliance -- whose 58 member companies include some of the nation's largest real estate brokers -- believes that the Two Package system would increase competition in the marketplace by giving consumers the ability to:

-- Choose from among lenders for packages of services (including

loan origination fee, credit report and appraisal) that are

required for the loan at an up-front guaranteed lump-sum price

(known as "Guaranteed Mortgage Packages"), and

-- Choose among lenders and non-lenders for packages of

settlement services (such as title and closing services) at an

up-front guaranteed lump-sum price (known as "Guaranteed

Settlement Packages").

The Realty Alliance is not the only national organization that has thrown its support behind the Two Package system. Besides RESPRO, the American Land Title Association (ALTA) and the Title and Appraisal Vendor Management Association have expressed support of a Two Package approach to RESPA reform.

McKee said The Realty Alliance believes the Two Package system would reduce the incentive for lenders to try to manipulate pricing of either interest rates or Guaranteed Settlement Packages, because consumers would have additional choices of settlement service packages, including those from both lenders and non-lenders.

About The Realty Alliance

The Realty Alliance is a national trade association that provides strategic ideas, discussion formats, timely information, idea sharing, and benchmarking to assist major providers of homeownership services in growing their companies' profitability. The Realty Alliance has 58 member companies whose closed sales volume in 2002 exceeded $182 billion. This represents more than 800,000 closed transactions completed by 76,200 sales associates in 2,146 offices. Many of the member companies are also involved in mortgage lending, title services and insurance. Additional information on The Realty Alliance can be found at www.therealtyalliance.com.