What is the Real Estate Settlement Procedures Act?

The Real Estate Settlement Procedures Act (RESPA) is a federal law enacted in 1974 to protect consumers from unfair real estate settlement practices. It applies to nearly every type of real estate transaction, including residential and commercial. In Georgia, RESPA regulates certain aspects of mortgage loans, including how lenders and other settlement service providers disclose costs and fees associated with the loan. RESPA requires lenders to provide borrowers with closing documents that clearly outline the terms of the transaction, as well as the estimated costs and fees associated with the loan. RESPA also protects borrowers by regulating the type of services that settlement service providers may offer, such as title insurance and escrow services. RESPA also prohibits kickbacks and other forms of fee splitting that can lead to higher costs for borrowers. Essentially, RESPA requires settlement services to be provided at fair market value. Lenders and settlement service providers are also required to disclose any referrals that they make to other settlement service providers. Finally, RESPA requires lenders and other service providers to respond to a written complaint from a borrower if they believe the service provider violated RESPA. Violators of RESPA may be subject to civil liability or criminal penalties.

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What is the Real Estate Settlement Procedures Act?

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