What does the Real Estate Settlement Procedures Act (RESPA) primarily address?

The Real Estate Settlement Procedures Act (RESPA) primarily addresses the transparency and disclosure of closing information in real estate transactions, particularly focusing on the avoidance of kickbacks and referral fees that can inflate costs for buyers. RESPA was established to provide consumers with clearer, more detailed information regarding the costs associated with their real estate transactions, ensuring that they are not subjected to unnecessary fees that could arise from undisclosed agreements between real estate service providers.

By mandating that lenders provide a Good Faith Estimate (GFE) and a HUD-1 Settlement Statement, RESPA aims to help consumers better understand the financial aspects of their closing process, making them more informed and capable of making better decisions. Thus, the emphasis of RESPA on reducing kickbacks ensures that all parties involved in real estate transactions operate transparently and ethically, ultimately promoting fairness in the market.

The other responses may address important aspects of real estate but do not pertain directly to the core purpose of RESPA, which is centered on preserving the integrity of the settlement process.