The Real Estate Settlement Procedures Act (RESPA) was enacted in 1974 to help consumers in the homebuying process. It provides that consumers receive advanced disclosures of settlement charges and prohibits illegal kickbacks and excessive fees. RESPA requires that consumers receive disclosures at various times in the transaction and outlaws kickbacks that increase the cost of settlement services. RESPA is consumer-focused piece of legislation which was designed to protect homebuyers from shady lenders and mortgage brokers. It enables consumers to make informed decisions and smarter financial decisions in the home buying process. It is enforced by the U.S. Department of Housing and Urban Development (HUD).
There have been many Settlement Agreements between the HUD and various businesses entities in the real estate and financial services industries. Where HUD was made aware or discovered possible violations of RESPA, certain agreements were formed which helped the violating organization learn more about the legislation and avoid the severest penalties provided under the act. These agreements are evidence that the legislation works and is effective. They also illustrate the flexibility of the HUD in their handling of potential violations.
The following list contains all of the RESPA Settlements Agreements since 2003.
http://www.hud.gov/offices/hsg/sfh/res/resetagr.cfm
In summary, the main areas of the settlement process that are addressed by RESPA are: Good Faith Estimate, management of escrow accounts, disclosure of affiliated business relationships, and the timely provisions of the HUD Settlement Statement.
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