Real Estate Settlement Procedures Act: What is it and why does it matter?

The Real Estate Settlement Procedures Act (RESPA) protects buyers by requiring disclosure of the amounts and types of charges they must pay at closing. Transactions involving a federally related mortgage loan secured by a lien on residential property are covered by the act. The following are the six principle areas of the RESPA as amended in 2015:

• Loan Estimate. (See TRID Section)
• Settlement cost booklet. The booklet was updated to reflect the new disclosure forms.
• Selection of the closing agent. The lender must disclose the business relationship and the charges of any closing agent if the lender requires that the loan be closed by that agent.
• Purchase of title insurance. A seller may not make it a condition of the sale that the buyer purchase title insurance from a particular company.
• No kickbacks. Service fees may not be paid unless a service was actually performed by a person licensed to do so, and all parties are informed. Referral fees between brokers are permitted.
• Closing Disclosure. (See TRID section)

Questions on your loan closing? Call us at 305-271-0100.