Nationwide Mortgage Licensing System (NMLS) Practice Exam

Question: 1 / 400

What is a primary goal of RESPA?

To maximize lender profits

To protect consumers from abusive practices during the loan closing process

The primary goal of the Real Estate Settlement Procedures Act (RESPA) is to protect consumers from abusive practices during the loan closing process. RESPA was enacted to ensure that consumers are provided with important disclosures regarding the nature and costs of the settlement process. By doing so, it aims to prevent practices that might unfairly increase the cost of obtaining a mortgage, such as unnecessary fees, kickbacks, or unearned fees that lenders or other parties in the transaction might attempt to charge.

The law mandates that borrowers receive clear and comprehensive information regarding their loan terms and the costs associated with closing, thereby promoting transparency and providing consumers with the tools they need to make informed decisions when securing a mortgage. This consumer protection focus is essential in fostering a fair lending environment and maintaining the integrity of the real estate market.

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To streamline the loan application process

To reduce property taxes

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