Real Estate Settlement Procedures Act

The Real Estate Settlement Procedures Act (RESPA) is a federal law that regulates mortgage loans. It prohibits kickbacks and referral fees during loan origination. It also places obligations and prohibitions on mortgage servicers, the companies that manage mortgage loans on a daily basis. 

When companies violate RESPA, they are liable for various types of damages.

If you think you’re rights were violated during mortgage origination or servicing, contact us for help. To get a free case review from our consumer loan attorney, complete our contact form.

How does RESPA regulate mortgage origination?

RESPA puts many restrictions on mortgage brokers and lenders. Congress, unfortunately, made many of these prohibitions unenforceable. 

There are, however, important rights private citizens can enforce, including:

  • Referal fees and kickbacks are prohibited for settlement-related business.
  • Fee sharing generally is prohibited for settlement services.
  • Duplicative fees or charges are prohibited.
  • Fees charged for services with no or questionable value are prohibited.

What happens when companies violate RESPA's mortgage origination provisions?

When lenders, brokers, and settlement providers violate RESPA, they are liable for three times the settlement charges a borrower pays. Courts also can award attorneys fees and costs, meaning consumers often don’t have to pay for legal representation. 

Visit our consumer loan page to see if we can help.

How does RESPA regulate mortgage servicing?

Mortgage servicers are companies that manage mortgage loans on a daily basis. RESPA places many obligations and prohibitions on mortgage servicers. 

Here are some of the things RESPA’s servicing provisions prohibit and require:

What happens when companies violate RESPA's mortgage servicing provisions?

When mortgage servicers violate RESPA, they are liable for actual damages and statutory damages. Actual damages provide compensation for monetary loss, anxiety, and stress caused. Statutory damages are awarded in an amount of up to $2000 for each RESPA violation. 

Visit our consumer loan page to see if we can help.

Hire us to help!

If you’re having problems with your mortgage, please contact us for help. To get a free case review from our consumer loan attorney, fill out our free case review form.

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