[b:49935b7cb6]RESPA[/b:49935b7cb6] ([b:49935b7cb6]Real Estate Settlement Procedures Act[/b:49935b7cb6]) is a consumer protection statute passed in 1974 and its main purpose is to help you get equipped with the settlement services. In addition, it also aims to reduce unnecessary costs included in the settlement cost of the loan.
Section 8 of RESPA Statute prohibits consumers from paying a fee or anything of value in exchange for referrals of settlement services involved in mortgage loan.
Section 9 of RESPA states that a seller should not ask a buyer to use a title insurance company, either directly or indirectly, as a condition of sale.
Section 10 of RESPA sets limits on the amounts that a lender may require a borrower to deposit into an escrow account for the purposes of paying taxes, hazard insurance and other fees related to the property.
RESPA gives the buyer a right to receive disclosures which speak out clearly about the costs associated with the settlement. Mortgage broker/lender must provide you with:
[list:49935b7cb6][*:49935b7cb6]An Information booklet - Consists of consumer information regarding different real estate settlement services.
[*:49935b7cb6]A Good Faith Estimate (GFE) - Gives an estimate of the settlement costs that a borrower needs to pay.
[*:49935b7cb6]Mortgage Servicing Disclosure Statement - It informs the borrowers as to whether the lender will service the loan or transfer it to another lender.
[*:49935b7cb6]Disclosure for escrow Account - This statement states how your escrow account will be managed by the lender or whether he will hand over the charge to someone else.[/list:u:49935b7cb6]