The Real Estate Settlement Procedures Act of 1974
The Real Estate Settlement Procedures Act of 1974 (RESPA) is a federal law that was enacted to protect consumers from unfair practices in the real estate settlement process. It requires lenders to provide consumers with certain disclosures and prohibits certain practices, such as kickbacks and referral fees. RESPA also requires
The Real Estate Settlement Procedures Act (RESPA) was a law passed by the United States Congress in 1974 and codified as Title 12, Chapter 27 of the United States Code, 12 U.S.C. §§ 2601–2617. The main objective was to protect homeowners by assisting them in becoming better educated while shopping for real estate services, and eliminating kickbacks and referral fees which add unnecessary costs to settlement services. RESPA requires lenders and others involved in mortgage lending to provide borrowers with pertinent and timely disclosures regarding the nature and costs of a real estate settlement process. RESPA was also designed to prohibit potentially abusive practices such as kickbacks and referral fees, the practice of dual tracking, and imposes limitations on the use of escrow accounts.