Which federal law mandates disclosures to consumers about mortgage loan settlements?

The Real Estate Settlement Procedures Act (RESPA) is the federal law specifically designed to mandate disclosures to consumers regarding mortgage loan settlements. RESPA aims to provide homebuyers and sellers with important information about the costs involved in the settlement process and to eliminate kickbacks and referral fees that can unnecessarily increase the cost of purchasing a home.

Under RESPA, lenders are required to provide a Good Faith Estimate (GFE) of settlement costs, as well as a HUD-1 Settlement Statement, which details all actual costs associated with the settlement. These disclosures give borrowers a clearer understanding of what they will owe at closing, making the home buying experience more transparent and informed.

Other laws mentioned, while related to consumer rights in finance and real estate, do not specifically focus on settlement disclosures. The Truth in Lending Act primarily deals with the transparency of loan terms and costs associated with credit, the Consumer Credit Protection Act established broader consumer protections, and the Housing and Urban Development Act addresses various housing issues without specifically outlining settlement disclosures.