What does RESPA primarily regulate?

The correct choice highlights that RESPA, which stands for the Real Estate Settlement Procedures Act, primarily regulates settlement procedures and closing costs in residential real estate transactions. This federal law aims to provide homebuyers and sellers with important disclosures regarding the costs associated with the settlement process, ensuring transparency and fairness in the closing of real estate transactions. RESPA mandates that lenders provide borrowers with a Good Faith Estimate (GFE) of closing costs and a HUD-1 Settlement Statement, detailing all charges and fees involved in the transaction.

By regulating these procedures, RESPA helps to prevent abusive practices and ensures that all parties involved are fully informed about the financial implications of their transactions. This focus on settlement costs is crucial in fostering a more predictable and equitable purchasing process for consumers.

While there are aspects of lending practices addressed under various laws, RESPA’s primary focus on settlement procedures distinguishes it clearly from choices related to rental agreements or marketing in real estate, which fall under different regulations and are not its primary concern.