Laws in a Nutshell
RESPA
Laws: Real Estate Settlement Procedures Act of 1974 and U.S. Department of Housing and Urban Development regulations
Major provisions:
- Prohibits real estate practitioners from receiving referral fees or anything else of value from service providers unless the salespeople actually perform a service that justifies the fee. Fees just for referring business are illegal.
- Prohibits practitioners or homebuilders from requiring buyers to purchase title insurance from a particular provider.
- Requires lenders to provide good faith estimates of closing costs and use the HUD-1 closing document.
More resources:
- RESPA DO's and DON'Ts
- RESPA-permitted fees - REALTOR® Magazine, August 2002
- HUD's RESPA information
