What is the primary purpose of RESPA?

The primary purpose of the Real Estate Settlement Procedures Act (RESPA) is to protect consumers by requiring clear disclosures regarding the costs associated with the settlement process when purchasing or refinancing real estate. This includes ensuring that consumers receive detailed information about the various fees involved in their transactions, which helps them make informed decisions. RESPA mandates that lenders provide borrowers with disclosures that outline the estimated closing costs, ensuring transparency throughout the mortgage process.

This focus on consumer protection and clear communication is essential for promoting understanding and preventing potential abuses or misunderstandings in real estate transactions. By requiring that these disclosures be made, RESPA fosters an environment in which consumers can better assess the financial implications of their mortgage choices.