What is the purpose of RESPA?

The purpose of the Real Estate Settlement Procedures Act (RESPA) is primarily to ensure that consumers receive disclosures regarding the nature and costs of the settlement process. This legislation aims to provide transparency in real estate transactions, allowing consumers to understand the costs involved in obtaining a mortgage and the processes surrounding settlements. By requiring that lenders furnish specific information, including good faith estimates and settlement statements, RESPA helps consumers make informed decisions and reduces the potential for confusion and fraud in the mortgage process.

This transparency is essential because it empowers consumers to compare different offers and understand what they are paying for, which ultimately promotes fair practices in the real estate market. This focus on disclosure and consumer protection is central to RESPA's purpose. Conversely, other options do not accurately reflect this core goal of the legislation.