Which statement about RESPA is true?

• A. Real Estate Standards and Property Act; standardizes appraisals
• B. Real Estate Settlement Procedures Act; requires disclosure of closing costs and prohibits kickbacks; ensures transparency in settlement processes
• C. Residential Estate Seizure and Protection Act; prevents foreclosure
• D. Real Estate Settlement Procedures Act; bans all closing cost disclosures

Answer: (B)

Real Estate Settlement Procedures Act is a federal law that protects homebuyers by making settlement costs transparent and fair. It requires disclosure of closing costs so borrowers can compare and understand what they will pay, and it prohibits kickbacks and certain fee arrangements that could inflate costs. RESPA also promotes transparency in the settlement process by requiring clear disclosures about how fees are charged and about any relationships with affiliated service providers.

The other statements miss key aspects: one misnames the act and incorrectly says it standardizes appraisals; another misstates its purpose as preventing foreclosure; and another wrongly claims it bans all closing cost disclosures.