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

The primary purpose of the Real Estate Settlement Procedures Act (RESPA) is to make consumers smarter shoppers. RESPA was enacted to ensure consumers can make informed decisions regarding their real estate transactions, particularly in the context of closing costs and settlement services.

The act mandates that lenders provide clear disclosures of the costs associated with real estate transactions, allowing buyers to compare the fees of different lenders and service providers. By requiring good faith estimates of closing costs and ensuring that consumers are aware of their rights, RESPA seeks to promote transparency in the home-buying process. This empowers consumers to shop around for the best deals, ultimately facilitating a more competitive market that can benefit them financially.

This emphasis on consumer education and informed decision-making significantly contributes to the overall goal of creating fair and efficient real estate practices.