RESPA

RESPA, the Real Estate Settlement Procedures Act, is a federal law governing certain residential mortgage transactions and settlement services. It requires disclosures about settlement costs and prohibits certain referral fees, kickbacks and fee-splitting arrangements involving settlement service providers.

Its relevance to valuation includes the restrictions on referrals of settlement services. Section 8 generally prohibits giving or accepting something of value in exchange for referrals involving settlement services, which affects how mortgage and valuation companies structure business relationships.

Borrowers encounter RESPA requirements through disclosures such as the Loan Estimate and Closing Disclosure, which itemize certain settlement costs, including appraisal fees. Separately, the Equal Credit Opportunity Act provides applicants with rights concerning copies of appraisals and other written valuations developed in connection with certain dwelling-secured credit transactions. These laws address different aspects of the mortgage process and should not be treated as interchangeable.