Which law establishes the rules for disclosing the cost of services in mortgage transactions?

The Real Estate Settlement Procedures Act (RESPA) is the correct answer because it directly addresses the need for transparency in the costs associated with mortgage transactions. RESPA’s primary goal is to protect consumers by ensuring they are fully informed about the settlement process and the costs involved. This includes the requirement for lenders to provide a Good Faith Estimate and a HUD-1 Settlement Statement, which give detailed breakdowns of all fees and charges the borrower will incur.

In contrast, while the Truth-In-Lending Act also aims for transparency, it focuses specifically on ensuring that borrowers receive clear information regarding the terms and costs of their loans, particularly the annual percentage rate (APR) and other finance charges. The Equal Credit Opportunity Act is designed to prevent discrimination in lending practices but does not specifically address cost disclosures. Similarly, the Dodd-Frank Act encompasses broader financial reform and consumer protection measures, but it is not primarily focused on disclosure requirements related to mortgage service costs as RESPA is. Therefore, RESPA is the law specifically establishing the rules for disclosing the costs of services in mortgage transactions.