About 37 years ago (1974), Congress put into effect the "Real Estate Settlement Procedures Act." Otherwise known as, RESPA. At the time, there was a noteworthy lack of understanding on the part of the consumer/home buyer regarding the real estate settlement process. Mainly regarding the fees charged.
So, what does RESPA do for us? Well, it serves two major purposes for the consumer:
- First, it gives the consumer information about the mortgage loan end of things, and the costs.
- Second, it disallows certain practices, for example, referral fees (or "kick backs") between service providers, which can result in higher costs to the consumer.
One of the specific ways that RESPA provides cost info to the consumer is via the, "Good Faith Estimate," and the "HUD-1" closing document. These two items provide the consumer with reliable numbers and estimated costs for their real estate purchase or sale! Very helpful.
For more information on RESPA, the "Good Faith Estimate," or the "HUD-1," or how you are protected by our consumer laws, please call me or email me directly...
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