What does RESPA regulate in real estate transactions?

• A. Real Estate Settlement Procedures Act; disclosures on closing costs; no kickbacks
• B. Title insurance requirements
• C. Flood zone disclosures
• D. Property tax calculations

Answer: (A)

RESPA focuses on the settlement process and how closing costs are disclosed, plus it prohibits improper practices that can inflate those costs. It requires borrowers to receive clear information about estimated and actual closing costs and bans kickbacks and unearned fees tied to real estate settlements. It also calls for disclosure of any affiliated business arrangements so consumers can shop around. RESPA applies to residential loans secured by one- to four-family properties that are federally related, and it governs the forms and timing of settlement disclosures (like the good faith estimate and the HUD-1/Closing Disclosure). It does not set title insurance requirements, flood zone disclosures, or property tax calculations, which are governed by other laws and agencies.