(MONEY Magazine) – With a parting shot aimed straight at home buyers' pocketbooks, outgoing U.S. Department of Housing and Urban Development Secretary Jack Kemp has issued new guidelines that could cost you thousands of dollars extra when you get a mortgage. The directives, released in late October, undermine key consumer protections built into the Real Estate Settlement Procedures Act (RESPA), a 1974 law passed to protect home buyers from abusive practices by real estate agents, bankers, lawyers and others involved in mortgage lending. Kemp maintains that the new rules bring down borrowing costs by encouraging more competition among lenders. But consumer advocates and even some HUD insiders say otherwise. < Admits one HUD official, who requested anonymity: ''The rules may actually eliminate competition and lead to higher costs for consumers.'' The new policies could hurt you several ways. For starters, they allow a real estate agent to charge you a fee for referring you to a lender. RESPA forbade such fees, but the new rules permit them so long as the agent makes the referral using a so-called computer loan origination system (CLO). A CLO is a computerized data base that includes loan information from local and national mortgage lenders who pay to be listed. If a CLO covered enough lenders -- say, 20 or so -- then it might help you find the best deal on a loan and thus could be worth paying for. Trouble is, the new HUD rules don't specify how many lenders a CLO must have -- so an agent can set up a system with only a single bank that gets all the referrals. Furthermore, since there's no limit on CLO fees, some experts think the charges could run as high as $250. The new rules also weaken a prohibition against kickback-like payments from lenders to real estate agents. The original RESPA outlawed such payments. But the new rules permit a brokerage to pay a bonus to any employee who refers a client to a lender, provided it and the brokerage are owned by the same parent company. And though HUD requires agents to disclose the affiliation, as well as any CLO fee, the disclosure form might be easy to miss in the blizzard of papers you sign when buying a house. The problem with HUD's new rules, of course, is that they may reward the agent for steering you to a less than ideal loan -- and, if he does so using a computer, allow him to charge you for the favor! A loan doesn't have to be dramatically inferior to cost you plenty. If an agent uses a CLO to put you in a $100,000 fixed-rate mortgage at 8.75%, for instance, when you could have found an 8.25% loan elsewhere, you would pay an extra $12,756 -- or an average of $425 a year -- over the life of a 30-year loan. Here are some steps you can take to protect yourself when buying a home: -- Ask your real estate agent whether he offers CLO referrals and, if so, what they cost and how many lenders are included in the system. You should not spring for the service unless it covers loans from at least 20 sources. -- Don't apply for a loan at an affiliated lender unless you are sure you can't get a better deal elsewhere. -- Scout for loans on your own. You can start by ordering a summary of loan deals in your area from the mortgage-tracking service HSH ($20 for a list of 25 to 65 lenders; 800-873-2837). Or watch your local newspaper for advertisements, and call at least a dozen lenders.

CHART: NOT AVAILABLE CREDIT: HSH Associates CAPTION: LEADING 30-YEAR ADJUSTABLE-RATE MORTGAGES LEADING 30-YEAR FIXED-RATE MORTGAGES LEADING HOME-EQUITY LINES IN THE LARGEST METRO AREAS COMMON LOAN INDEXES