Real Estate Closing Costs: Real Estate Settlement Procedures Act (RESPA), Section 14a. Volume II: Settlement Performance Evaluation

摘要

The effectiveness of the Real Estate Settlement Procedures Act (RESPA) as passed in 1974 and amended in 1975 is evaluated, and modifications and alternatives to the Act are considered based on evaluation findings. RESPA intends to provide the home buyer and seller with greater and more timely information about settlement, while reducing certain abusive settlement practices. The act assumes that appropriate consumer information leads to more shopping and thus more competitive settlement service markets. RESPA is based on a microeconomic model of competition, so its evaluation requires that an economic analysis of the major settlement service markets be performed. This analysis is also used to assess the feasibility and advisability of different approaches for modifying or developing alternatives to RESPA. A descriptive overview of the settlement process examines brokerage, mortgage lending, private mortgage insurance, title assurance, and legal and conveyancing services. A detailed discussion of pricing for the various settlement services and individual settlement service markets is provided. The impact of RESPA is examined in terms of compliance with the implementation of RESPA provisions, changes in the settlement process as a result of RESPA, and the price impact of RESPA. Tabular data are provided.