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

The primary purpose of the Real Estate Settlement Procedures Act (RESPA) revolves around ensuring that buyers are informed of settlement costs involved in real estate transactions. This legislation requires that consumers receive detailed information about the costs associated with settlement services. By providing this transparency, RESPA aims to help consumers better understand the financial obligations they face when purchasing a home, thus enabling them to make informed decisions.

RESPA mandates that lenders provide a good faith estimate of closing costs, and it offers regulations on the timing of disclosures, ensuring that buyers know what to expect financially when entering into a real estate deal. This consumer protection aspect is crucial in the home-buying process, as it can prevent unexpected charges and allows buyers to compare costs among different service providers.

While eliminating kickbacks and referral fees is an important aspect of RESPA, it is ultimately part of the broader goals of transparency and informed decision-making for buyers regarding settlement costs. Thus, the emphasis on informing buyers about these costs aligns most directly with the primary purpose of the act.