3.2 What is the origin and purpose of RESPA?


The Real Estate Settlement Procedures Act became effective on June 20th, 1975. The Act requires lenders, mortgage brokers, or servicers of home loans to provide pertinent and timely disclosures regarding the nature and costs of the Real Estate settlement process. The Act prohibits acts such as kickbacks, and places limitations upon the use of escrow accounts. The Department of Housing and Urban Development (HUD) originally promulgated Regulation X which implements RESPA.