What does RESPA apply to?

RESPA, the Real Estate Settlement Procedures Act, specifically applies to real estate transactions involving federally related mortgage loans. This includes residential loans for one-to-four family dwellings. The primary purpose of RESPA is to protect consumers by requiring disclosures that provide information about the settlement process, helping them understand the various costs involved and preventing abusive practices.

In the context of residential transactions, RESPA ensures that borrowers receive clear information about the costs and terms of their loans, promoting transparency in the real estate closing process. It also addresses the use of escrow accounts and prohibits certain practices such as kickbacks.

Other options, such as real estate purchase transactions in general or commercial real estate loans, do not fall under RESPA's jurisdiction. Similarly, business loans with collateral are not covered by RESPA as this act specifically targets residential mortgage transactions involving personal residences, hence solidifying why the focus remains on real estate credit transactions for one-to-four family dwellings.