What was the primary purpose of enacting the Real Estate Settlement Procedures Act?

The primary purpose of enacting the Real Estate Settlement Procedures Act (RESPA) was to protect consumers from abusive lending practices. RESPA was established to ensure that borrowers receive disclosures about the costs and terms of their mortgages and to eliminate practices that could result in inflated costs during the settlement process. By mandating that lenders provide borrowers with clear and concise information regarding their loan terms and settlement costs, RESPA helps to safeguard consumers from potentially predatory practices that may arise in real estate transactions.

While increasing transparency in transactions and simplifying closing procedures are important aspects that RESPA addresses, the core intent is centered around consumer protection. It specifically aims to empower individuals by providing them with the necessary information to make informed decisions regarding their real estate transactions. This focus on protecting consumers from potential exploitation by lenders and service providers is what distinguishes RESPA as a critical piece of legislation in the realm of real estate finance.