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What does RESPA stand for?

  1. Real Estate Settlements Processing Act

  2. Real Estate Settlement Procedures Act

  3. Regulatory Enforcement of Settlement Processes Act

  4. Real Estate Securities and Protected Assessment Act

The correct answer is: Real Estate Settlement Procedures Act

The term RESPA stands for the Real Estate Settlement Procedures Act. This federal law is designed to help consumers better understand the costs associated with the real estate settlement process, primarily when purchasing a home. It mandates that lenders provide borrowers with pertinent information regarding the settlement process, including estimated settlement costs and the right to receive a Good Faith Estimate of the charges expected to be incurred during the transaction. The act plays a significant role in protecting consumers from abusive practices and helps to ensure that they can make informed decisions regarding the financial aspects of their real estate transactions. By requiring transparency and standardized disclosures, RESPA aims to eliminate the potential for hidden fees and ensure that all parties involved are aware of their rights and responsibilities. The other options, while they may contain terms related to real estate or settlements, do not accurately define RESPA. Therefore, the selection of Real Estate Settlement Procedures Act as the correct answer emphasizes the statute's critical purpose in the realm of real estate transactions and consumer protection.