RESPA What You Need To Know Now When Buying A New Home
RESPA, What you need to know now about the Real Estate Settlement Procedures Act. First, the directive of RESPA is to make certain disclosures with the real estate settlement process. Therefore, home buyers can make informed decisions regarding their real estate transactions. Second, is the prohibition of certain unlawful practices by real estate settlement providers. Such as kickbacks and referral fees which can potentially increase settlement costs for buyers.
The Purpose of RESPA
The purpose of RESPA is to govern the real estate settlement process. Therefore, commanding all parties fully inform borrowers about all closing costs. Also governing lender servicing, escrow account practices and business relationships between closing service providers and other parties to the transaction.
What does The Real Estate Settlement Procedures Act Cover?
RESPA or Regulation X covers mortgage loans on a one-to-four family residential dwelling. These include most purchase loans, assumptions,refinances and property improvement loans. Last but not least, this also includes equity lines of credit. Likewise, RESPA regulates the use of Escrow accounts and restricts sellers from mandating title insurance companies.
Final Thoughts About RESPA
These five letters can have an affect on your financial well being when you are buying a home. Additionally, according to HUD (Housing and Urban Development), the goal of the rule is to clarify and outline the settlement process and fees to consumers. Correspondingly, the elimination of illegal activity such as kickbacks and referral fees among settlement service providers. As a side note, HUD’s responsibility for enforcing RESPA ended in 2010 by transferring it’s authority to the CFPB (Consumer Financial Protection Bureau). Moreover, this was due to the Dodd-Frank Wall Street Reform and Consumer Protection Act.
If you would like more information on buying a home in Sun Lakes or you would like a copy of our FREE Guide to Buying Home click here. Or call us at 480-440-0849. The Kolb Team is your Arizona’s active adult community experts!
Let’s be friends! Follow us on social media for up to date information on Sun Lakes and surrounding communities.