What is the main purpose of the Real Estate Settlement and Procedures Act (RESPA)?

The main purpose of the Real Estate Settlement and Procedures Act (RESPA) is to require accurate closing cost figures. This federal law is designed to provide transparency in the real estate closing process and ensure that borrowers receive disclosures about the costs they will incur at settlement. By requiring lenders and settlement service providers to disclose information such as estimated and final closing costs, RESPA helps consumers make informed decisions and protects them from unexpected charges. The act aims to eliminate certain abusive practices, such as kickbacks and referral fees, which can contribute to inflated costs. Thus, the emphasis on accurate closing cost figures is fundamental to RESPA's objective of protecting consumers during real estate transactions.