What is a primary goal of RESPA in real estate transactions?

What is a primary goal of RESPA in real estate transactions?

• A. To increase construction costs
• B. To ensure full disclosure
• C. To enhance property tax revenue
• D. To regulate commercial transactions

Answer: (B)

The primary goal of the Real Estate Settlement Procedures Act (RESPA) is to ensure full disclosure in real estate transactions. This federal law was enacted to protect consumers by requiring disclosures that inform them about the various costs associated with the settlement process, including fees for services related to the transaction. By mandating that borrowers receive clear and concise information, RESPA helps consumers make informed decisions regarding their mortgages and helps prevent abuse and fraudulent practices in the settlement process. This focus on transparency is crucial because many buyers may be unaware of all the costs involved in closing a real estate transaction. RESPA's requirements encourage lenders and other professionals involved in real estate transactions to provide accurate and timely information, which ultimately fosters trust and accountability in the industry. In contrast, the other options do not align with the foundational objectives of RESPA. The act does not aim to increase construction costs, enhance property tax revenue, or specifically regulate commercial transactions; rather, its primary emphasis is on consumer protection and awareness in residential real estate transactions.

The primary goal of the Real Estate Settlement Procedures Act (RESPA) is to ensure full disclosure in real estate transactions. This federal law was enacted to protect consumers by requiring disclosures that inform them about the various costs associated with the settlement process, including fees for services related to the transaction. By mandating that borrowers receive clear and concise information, RESPA helps consumers make informed decisions regarding their mortgages and helps prevent abuse and fraudulent practices in the settlement process.

This focus on transparency is crucial because many buyers may be unaware of all the costs involved in closing a real estate transaction. RESPA's requirements encourage lenders and other professionals involved in real estate transactions to provide accurate and timely information, which ultimately fosters trust and accountability in the industry.

In contrast, the other options do not align with the foundational objectives of RESPA. The act does not aim to increase construction costs, enhance property tax revenue, or specifically regulate commercial transactions; rather, its primary emphasis is on consumer protection and awareness in residential real estate transactions.