Lower Mortgage Payments RESPA - The Real Estate Settlement Procedures Act

To help lower mortgage payments, RESPA was passed to control the borrowers costs in mortgage services and stop referral fees that increase the costs of mortgage cost.

Lenders must provide the following mortgage info.

1) Costs associated with the mortgage.

2) The lenders services and escrow practices.

3) Describe business relationships between lender service providers.

Lenders are prohibited from using the following practices that increase the cost of mortgage services.

1) A person cannot give or accept any thing of value for referrals related to a federal mortgage loan.

2) A person cannot give or accept any part of a charge for services that are not performed.

3) Home sellers can't require buyers to purchase title insurance from a particular company.

Mortgage brokers and/or lenders must give the borrowers the following documents at the time of applying or must be mailed within 3 days of application.

1) Special Information Booklet, which contains mortgage information regarding various real estate settlement services.
2) Good Faith Estimate of settlement costs that includes a list of charges the buyer is likely to pay at settlement. Also the lender must also disclose if they require that the borrower use a particular settlement provider.
3) Mortgage Servicing Disclosure Statement that discloses to the borrower how to handle complaints and whether the lender intends to service the loan or transfer it to another lender.

A mortgage is a huge financial investment. The Real Estate Settlement Procedures Act makes sure that the mortgage lender uses fairness during the process. When getting a mortgage be sure you understand everything before signing.