Which law mandates that creditors disclose associate, non-arms length relationships in the loan process to the borrower?

The Real Estate Settlement Procedures Act (RESPA) is designed to ensure transparency in the settlement process, particularly in real estate transactions involving federally related mortgage loans. One of its key provisions requires creditors to disclose any affiliations that may affect the transaction, particularly non-arms-length relationships. This mandates that lenders inform borrowers if the lender, broker, or any associated party has a vested interest in any services that may be provided during the loan process. By requiring this disclosure, RESPA aims to prevent conflicts of interest and ensure borrowers are fully informed about the dynamics of the transaction, which ultimately enhances consumer protection and promotes fair treatment in real estate transactions.