What is the purpose of RESPA?

• A. Protect consumers in the settlement process and eliminate kickbacks
• B. Regulate mortgage interest
• C. Set appraisal standards
• D. Limit fees charged by lenders

Answer: (A)

RESPA aims to protect consumers during the real estate settlement process by increasing transparency and curbing practices that raise closing costs, especially kickbacks and referral fees among settlement service providers. It requires clear disclosures of settlement costs and bans unearned fees or kickbacks, helping borrowers understand and compare their costs. It also requires information about affiliated business arrangements. RESPA applies to federally related mortgage loans on 1–4 unit residential properties. It does not set mortgage interest rates, does not establish appraisal standards, and does not broadly cap lender fees.