What is the primary purpose of the Real Estate Settlement Procedures Act?

The primary purpose of the Real Estate Settlement Procedures Act (RESPA) is to ensure transparency in the closing process. RESPA was enacted to help consumers better understand the costs associated with the settlement process when buying or refinancing residential property. It requires mortgage lenders to provide borrowers with important information about the costs and settlement services involved in real estate transactions. By mandating that disclosures be made, RESPA helps to eliminate surprises at the closing table, allowing buyers to make informed decisions.

In addition, RESPA aims to address and prevent practices like kickbacks and unearned fees in the real estate industry, which can lead to higher costs for consumers. By providing clear, meaningful information about settlement services and fees, RESPA works to protect homeowners and streamline the home-buying process.

Seeking government backing for loans or regulating mortgage interest rates does not fall within the scope of RESPA. While assisting buyers in finding properties is an important function in the real estate market, it is not the focus of this specific legislation. Instead, RESPA concentrates primarily on ensuring that consumers receive clear and comprehensive information about closing costs and procedures.