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What is RESPA?

As the leading advocate for housing issues, the National Association of REALTORS® supports a market-based approach to reform of the Real Estate Settlement Procedures Act to encourage fair competition; protect consumer choice; and provide transparency, or full disclosure, of costs and services in the mortgage transaction.

RESPA is a consumer protection law that ensures that home buyers and sellers know about all settlement costs in a real estate transaction. The law also prohibits kickbacks in an effort to prevent fees that drive up the costs of the transaction.

In light of the current housing and credit problems facing our economy, the time is right to improve consumer disclosures under RESPA.

In March 2008, the U.S. Department of Housing and Urban Development issued a proposed rule that includes provisions to modify the Good Faith Estimate and the HUD-1 settlement statement.

NAR will be working with industry partners and REALTORS® to ensure that the final rule provides simple and clear disclosure and explains the essential elements of the real estate transaction adequately and in a way that is easy to understand.

Modifications should empower consumers by providing loan information in a consumer-friendly format, helping them shop for the mortgage that best fits their needs.

This is not the time for comprehensive reform that would fundamentally change the settlement service industry resulting in disruptive and damaging implementation time, costs and confusion.

Any final rule must focus tightly on disclosures and avoid a comprehensive, confusing, and costly reordering of the settlement process.