Real Estate Settlement Procedures Act (RESPA)

The Real Estate Settlement Procedures Act (RESPA) is a federal law that protects consumers from unfair or deceptive practices in the real estate settlement process. RESPA was enacted in 1974 to ensure that consumers are informed about the costs of buying or selling a home and to prevent kickbacks and other abuses.

RESPA applies to all residential real estate transactions, including purchases, sales, and refinancings. The law requires lenders and other settlement service providers to disclose information to consumers about the costs of settlement services, and to provide consumers with a good faith estimate of the costs of settlement. RESPA also prohibits kickbacks and other forms of illegal compensation between settlement service providers.

The Consumer Financial Protection Bureau (CFPB) is the federal agency responsible for enforcing RESPA. The CFPB has issued a number of regulations to implement RESPA, including regulations that:

• Require lenders to provide consumers with a Loan Estimate at the beginning of the loan process and a Closing Disclosure at the end of the process.
• Prohibit kickbacks and other forms of illegal compensation between settlement service providers.
• Require settlement service providers to provide consumers with information about their services and fees.

RESPA is an important law that protects consumers from unfair or deceptive practices in the real estate settlement process. If you are involved in a real estate transaction, it is important to be aware of your rights under RESPA.