In real estate finance, the Real Estate Settlement Procedures Act, commonly known as RESPA, is a federal law designed to protect borrowers by promoting transparency in real estate settlement and closing processes. It requires lenders to disclose settlement procedures and costs so borrowers can better understand and compare loan terms.
RESPA mandates the use of specific disclosures, pamphlets, and forms prescribed by the United States Department of Housing and Urban Development. The law also regulates certain practices, such as kickbacks and referral fees, to help ensure fairness and clarity in residential real estate transactions.
