RESPA, the Real Estate Settlement Procedures Act, regulates the disclosure of costs and affiliated business arrangements or AfBA's in a real estate settlement transaction.
By using the lenders for their regulation, Congress was able to bypass a myriad of state laws and differing statutes relating to real estate transactions across the country. Lenders must abide by RESPA, and this effectively allows the control of the settlement process through them. The basic coverage of RESPA is "any federally related mortgage loan."
As most residential loans end up federally related in some way through federal loan guarantees and mortgage funding consolidation, RESPA covers the vast majority of real estate transactions. Specifically, the coverage triggers include:
Installment sales contracts, or land contracts, would also be covered if the seller taking back part of the loan is also funded by another loan on that property that is covered by RESPA.
