More than two years after national settlement reform legislation was implented, the Department of Housing and Urban Development is failing to meet its legal responsibility to protect home buyers against high settlement costs, the Housing Research Group charged in a report submitted this week to HUD Secretary Patricia Roberts Harris.

The organization, part of Ralph Nader's Center for the Study of Responsible Law, said the agency has not enforced the Real Estate Settlement Procedures Act of 1974, which required HUD to find ways to end abuses in the field. Encouragement of reforms such as discount brokerage services and modernized title assurance systems could save consumers "literally billions of dollars a year," the group contended.

A HUD spokesman said a response to the report was being prepared.

he Nader group is the agency has not provided sufficient personnel to implement the settlement reform act. HUD, with 15,000 employees, has assigned three people to its Real Estate Practices staff, which is supposed to oversee the multi-billion-dollar real estate industry, the group pointed out. Half the staff's time is committed to energy conservation work, the report added. One current employee has been borrowed from the Office of Interstate Land Management while two permanent positions have not been filled, according to the study.

In addition, the department has not allocated sufficient funds to implement the act, the group said. As an example, RESPA requires HUD to recommend legislative changes in the real estate field based in part on extensive studies, none of which have been set up, the group said.

What work has been done under RESPA has been "tardy" and "slipshod," the report alleges. One assessment of the effect of including seetlement cost data in consumer information packages was due 11 months ago, but the research group said the report will not be ready until mid-1980.

The organization maintains that the lack off staff and budget does not permit the Real Estate Practices staff to fully investigate current industry policies to consider alternatives.

This HUD office's "low productivity is especially unfortunate given HUD's potential for doing good in this area," the group maintained. "HUD could encourage the creation of institutional mechanisms to reduce the cost and complexity of buying and selling a home."

HUD could be encouraging the use of legitimate "discount brokers," for instance, while weaning out those who use "bait-and-switch tactics, the group said. Discount realtors can provide services for as little as one-tenth the price of full-commissioned brokers the group pointed out.

"Although brokers' fees are supposed to be negotiable most brokers usually charge the seller a standrad commision of 6 per cent of the purchase price for their services. But brokers' fees need not be so costly. Consumers can take complete or partial responsibility for selling their own homes, as an estimated 10 per cent of home sellers already are."

The group maintains that if consumers "were to select different levels of brokerage services at an average cost of only 3 per cent of the sales price, consumers could save as much as $3.5 billion."

When it comes to title insurance, required by lenders to protect their interest in houses they finance, the Nader organization said HUD "has not even begun tp protect consumers from . . . inefficiencies and abuses."

Consumers pay "more than they should for this insurance because effective price competition is lacking in the title industry," the group said. "According to the U.S. Department of Justice," the report said, "the title insurance industry is characterzied by the curios phenomenon of 'reverse competition' - the more title insurers compete for consumers' business by paying rebates and similar referral fees to attorneys, lenders, and real estate brokers for customer referrals, the higher the price of the insurance to the consumer.

"If title insurance reform were implemented today," the study contended, "including the adoption of title registration and abolition of unneeded title insurance, the potential savings could amount to $500 million annually."

The report criticized the lack of interest payments on escrow accounts and noted that interest is required in only five states.

"Consumers wind up forfeiting millions of dollars annually," the group said.

Curt Troutman, a spokesman for the Housing Research Group, said his organization contacted "a broad spectrum of brokers, lenders, attorneys, and consumers in the Washington area" for its study." He said there was "an exchange of information" with such groups as the American Land Title Association, National Associations of Realtors, and the American Bankers Association.

"I would have tos say," he acknowledged, "that they were not in agreement with our conclusions. They generally feel their services are adequate and the prices they charge are competitive. We don't agree with that."

Troutman also noted that his organization had prepared a "how-to-do-it" manual for consumers in the real estate area. The Nader spokesman said the document was in its earliest form and that no decision had been made on whether it would be published. Other Nader groups have produced "how-to-do-it" booklets in such fields as law and pest control.