What is the purpose of the Real Estate Settlement Procedures Act (RESPA)?

The Real Estate Settlement Procedures Act (RESPA) was enacted to provide transparency in the real estate settlement process and protect consumers from unnecessarily high settlement costs. This law aims to ensure that homebuyers are informed about the different costs associated with real estate transactions, including closing costs, title insurance, and other fees that might arise during the settlement process.

By mandating that lenders, brokers, and settlement service providers disclose various aspects of the costs and services, RESPA enhances buyer awareness and allows for better comparison between services. This transparency is crucial in helping consumers make informed decisions, preventing them from being surprised by hidden fees or exorbitant charges that can significantly increase the total cost of purchasing a home.

In summary, the primary focus of RESPA is consumer protection and ensuring a fair and transparent home buying experience, rather than influencing fee structures or targeting specific market segments.