What does RESPA regulate in real estate transactions?

What does RESPA regulate in real estate transactions?

• A. RESPA stands for Real Estate Settlement Procedures Act; regulates disclosures, restricts property zoning.
• B. RESPA stands for Real Estate Settlement Procedures Act; regulates disclosures, prohibits kickbacks, and governs settlement practices.
• C. RESPA stands for Real Estate Settlement Procedures Act; directly sets interest rates.
• D. RESPA stands for Real Estate Settlement Procedures Act; only applies to commercial loans.

Answer: (D)

RESPA focuses on the process and protections around settling a residential mortgage, not on pricing, zoning, or commercial loans. It requires clear disclosures to homebuyers, prohibits kickbacks and unearned fees, and governs how settlement services are arranged and billed. It applies specifically to federally related residential mortgage loans (typically 1-4 unit dwellings) and does not set interest rates. Because of that scope, the option describing disclosures, anti-kickback protections, and settlement practices best captures RESPA’s role in real estate transactions.

RESPA focuses on the process and protections around settling a residential mortgage, not on pricing, zoning, or commercial loans. It requires clear disclosures to homebuyers, prohibits kickbacks and unearned fees, and governs how settlement services are arranged and billed. It applies specifically to federally related residential mortgage loans (typically 1-4 unit dwellings) and does not set interest rates. Because of that scope, the option describing disclosures, anti-kickback protections, and settlement practices best captures RESPA’s role in real estate transactions.