RESPA is a law that protects the buyer

If you bought a property you must have received not the end, but when you applied for your loan, some documents, or a brochure that tells you your rights under RESPA. These initials stand for the “Procedures Act Real Estate Settlement” and are the abbreviation for “Real Estate Settlement Procedures Act”.

From experience I have to say that most buyers overlook. I understand them, are dozens of documents and papers that require a signature and an avalanche of information that is received from the buying process begins. And that, if we talk of closing are so many documents I have seen people like automatons signing.

But here’s the detail. That’s not good practice and I invite you to learn, ask and analyze in detail all you’re signing you’re sure it’s a good buy and you assert your rights. This is advice that should apply in any contract or document that firm, and although there are careful when signing people overlook it when it is so much paperwork. But trust me, and read carefully.

The lender must provide a brochure with information costs of your loan, which is called a Good Faith Estimate or English “Good Faith Estimate” or GFE as might see in some documents.

These documents should not only be estimated costs of closing costs but as a whole, how much is expected to be their expenses. What is sought with this is to protect it from abusive practices that have occurred, and that the consumer is insurance that pays the real price for your loan.

It must be made within three days after receiving your loan application.

It is only for the buyer. Not to be given to the seller.

If your loan application is rejected before that time (three days), do not deliver the documents.

RESPA is a federal law passed in 1974, which has had several modifications. As of July 21, 2011, it is administered and supervised by the Bureau of Consumer Financial Protection (CFPB, in English).

The most recent changes to RESPA require that the Good Faith Estimate is included. Keep in mind that as the name implies is an estimate, which means there may be some variation to the report of closing costs you get in the “Settlement Statement “(document known as” HUD-1 “) before closing. This document, which must be submitted at least 24 hours prior to closing, is that tells you exactly how much the final cost and should lead to the closure. There are several factors involved in these changes, but if you have doubts, you should consult your banker or real estate agent.

This booklet helps buyers understand how the loan and interest rates work, discount points, how much is the total payment of the loan, if you have prepayment penalties and how to understand the monthly mortgage payments.

If you find incorrect information in the documents included in the prospectus RESPA does not mean you can sue, but if it is your desire can consult a specialized lawyer. The Act RESPA was made to protect their rights but especially so in time to identify if the lender is taking advantage of you, or worse still doing fraud. Although the latter is not the practice of the majority, because they are serious bankers themselves are still being made mortgage lending scams greatly hurting the consumer. The law gives you the right but you have to exercise and stay informed. That’s their obligation.


Official website of RESPA.

It Bureau for Consumer Financial Protection.