What does RESPA stand for?

The correct answer is the Real Estate Settlement Procedures Act, commonly referred to as RESPA. This federal law was enacted to ensure that homebuyers and sellers have a clear understanding of the costs associated with real estate transactions. It specifically aims to promote transparency in the settlement process by requiring detailed disclosures of all settlement costs and prohibiting certain practices that increase the costs of settlement services, such as kickbacks and referral fees.

RESPA is crucial in protecting consumers during the mortgage lending process by allowing them to make informed decisions. It mandates that lenders provide a Good Faith Estimate (GFE) of settlement costs and the HUD-1 Settlement Statement, which outlines the actual costs of the transaction. This transparency helps borrowers better understand their financial obligations and reduces the likelihood of discovering unexpected fees at closing.

The other provided options do not accurately reflect the purpose or name of the act. They either misstate its title or do not refer to any real legislative enactment related to real estate transactions. This highlights the importance of knowing the correct terminology in the field of real estate and mortgage lending to ensure compliance with the law and to protect consumer rights.