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

• A. To mandate disclosure of closing costs and relationships
• B. To regulate mortgage interest rates
• C. To set appraisal standards
• D. To govern property taxes

Answer: (A)

RESPA protects consumers during the real estate settlement by ensuring they receive clear, timely information about settlement costs and the relationships among settlement service providers. By mandating disclosures of estimated and final closing costs and of any affiliated business arrangements, RESPA helps borrowers compare costs and guards against hidden fees and kickbacks. This focus on transparency in the closing process is why choosing the disclosure of closing costs and relationships best fits RESPA’s purpose. It doesn’t set mortgage rates, appraisal standards, or property taxes, which are handled by other laws and agencies.