RESPA was signed into law in December 1974, and became effective on June 20, 1975. The Real Estate Settlement Procedures Act (RESPA) provides consumers with improved disclosures. The Act was also introduced to eliminate abusive practices in the real estate settlement process, reduce the costs of closing, to prohibit kickbacks, and to limit the use of escrow accounts.
RESPA applies to the majority of purchase loans, refinances, property improvement loans, and equity lines of credit and it requires lenders, mortgage brokers, or servicers of home loans to provide disclosures to borrowers concerning real estate transactions, settlement services, and consumer protection laws.
Information is for general educational purposes and should not be considered legal advice.
