What does RESPA stand for?

RESPA stands for the Real Estate Settlement Procedures Act. This federal law was enacted to provide transparency in the real estate settlement process, ensuring that consumers are informed about the costs associated with buying a home or obtaining a mortgage. It also regulates certain practices in the mortgage industry to prevent abusive practices and protect consumers.

Under RESPA, lenders are required to provide borrowers with a Good Faith Estimate (GFE) of settlement costs, and they must also disclose any potential conflicts of interest. The law emphasizes clear communication and full disclosure throughout the transaction, which is essential for protecting consumers during one of their most significant financial commitments. By providing necessary information, RESPA helps buyers make informed decisions and understand the true cost of their mortgage and associated fees.