Thursday, July 08, 2010

LOL....I'm sorry but this makes me laugh.

The vagueness of the individual factors is compounded by the subjective balancing process inherent in the test. HUD explains that the ten factors “will be considered together in determining whether the entity is a bona fide settlement service provider.” But HUD gives no indication how many factors might be determinative, or which factors might weigh more heavily in the analysis. Any entity wishing to operate as an ABA (an arrangement RESPA specifically condones, with certain limitations) is thus confronted with a massive gray area. At some point within that gray area, both civil and criminal liability might attach. But the test gives no indication of where that point might be. Thus, the regulation does not contain “sufficient exactness to prevent arbitrary enforcement and give notice of what an individual must do to comply with the enactment.”Belle Maer, 170 F.3d at 559.

source document 

DUH!  It's gray and vague because that is what the industry establishment wanted!  They specialize in lobbying for vague rules so they can make a mint teaching everybody how to interpret and beat the rules.  They LOVE living in the gray because the line moves with the political environment. This is hilarious.   This is fascinating and in the interest of preventing a sham explosion of any kind, I do hope HUD and state insurance regulators will take note and provide clear guidance.  Need help?  I'm sure there are lots of us with good ideas. ;)

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