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Simple English definitions for legal terms
Real Estate Settlement Procedures Act
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A quick definition of Real Estate Settlement Procedures Act:
The Real Estate Settlement Procedures Act (RESPA) is a law that makes sure that people who are buying a home get information about how much it will cost to settle the sale. This law requires lenders to give buyers information about the costs they can expect to pay. It helps people understand what they are paying for and why.
A more thorough explanation:
The Real Estate Settlement Procedures Act (RESPA) is a federal law that requires lenders to provide home buyers with information about known or estimated settlement costs. This law helps protect home buyers from being surprised by unexpected fees and charges when they purchase a home.
For example, if you are buying a home and your lender is charging you a fee for processing your loan, RESPA requires the lender to disclose this fee to you in advance. This way, you can budget for the fee and avoid any surprises at closing.
Another example of how RESPA works is if you are buying a home and your lender requires you to use a specific title company for the closing. RESPA requires the lender to disclose this requirement to you in advance and provide you with an estimate of the title company's fees. This way, you can compare the fees to other title companies and make an informed decision.