Your rights under RESPA.
The Real Estate Settlement Procedures Act (RESPA) protects homebuyers and homeowners by requiring disclosures about settlement costs and prohibiting certain harmful practices. This notice explains your rights in the home buying and mortgage servicing process.
Snapshot
Effective: August 1, 2025
Applies to: Home purchase and refinance transactions.
Key Right: Clear disclosure of all settlement costs upfront.
Important: Settlement Cost Transparency
RESPA ensures you know exactly what you're paying at closing. HIP's closing costs calculator helps you estimate these costs, but your lender's official Loan Estimate and Closing Disclosure are your definitive documents.
Your Rights Under RESPA
Federal law protects you throughout the home buying and mortgage servicing process.
RESPA guarantees you the right to
- Receive a Loan Estimate within 3 business days of applying for a mortgage.
- Receive a Closing Disclosure at least 3 business days before closing.
- Shop for settlement services (title insurance, inspections, etc.) without being required to use a specific provider.
- Receive written notice when your loan servicing is transferred to a new company.
- Have complaints about your loan servicer investigated and responded to.
- Be protected from kickbacks and referral fees that inflate your costs.
- Have your escrow account managed properly with annual statements.
Required Disclosures
RESPA requires specific disclosures to help you understand and compare closing costs.
Loan Estimate
Within 3 business days of receiving your application, the lender must provide a Loan Estimate detailing expected interest rates, monthly payments, and closing costs.
Closing Disclosure
At least 3 business days before closing, you'll receive a Closing Disclosure with final terms. Compare this to your Loan Estimate—significant changes may delay closing.
Affiliated Business Disclosure
If a settlement service provider refers you to an affiliated company, they must disclose the relationship and your right to shop elsewhere.
Servicing Transfer Notice
If your loan servicer changes, both the old and new servicers must notify you at least 15 days before or after the transfer.
The Closing Disclosure includes
- Loan terms (amount, interest rate, monthly payment)
- Projected payments over time (including taxes and insurance)
- Closing costs broken down by category
- Cash to close (what you need to bring to closing)
- Summaries of transactions for buyer and seller
- Loan calculations (total payments, finance charges, APR)
- Contact information for lender, settlement agent, and real estate agents
Three-Day Review Period
You must receive your Closing Disclosure at least 3 business days before closing. This gives you time to review the final terms and compare them to your Loan Estimate. Certain changes to APR, loan product, or adding a prepayment penalty require a new 3-day waiting period.
Prohibited Practices
RESPA prohibits certain practices that can increase costs or limit your choices.
RESPA prohibits
- Kickbacks: No one can pay or receive a fee for referring settlement services. This prevents inflated costs from hidden referral arrangements.
- Fee splitting: Settlement service providers cannot split fees with anyone who did not actually perform a service.
- Required use of affiliated services: Sellers cannot require you to use a specific title insurance company as a condition of sale.
- Excessive escrow deposits: Servicers cannot require more than 2 months of cushion in your escrow account.
- Charging for unperformed services: You cannot be charged for services that were not actually provided.
How HIP Protects You
HIP does not receive or pay referral fees for settlement services. When we connect you with lenders or recommend service providers, we disclose any business relationships. You are always free to shop for and choose your own settlement service providers.
Escrow Account Rules
If you have an escrow account for taxes and insurance, RESPA protects you.
Your escrow account rights include
- Initial escrow disclosure at or before closing showing anticipated deposits and disbursements.
- Annual escrow account statement showing activity and projected payments for the coming year.
- Prompt refund of any escrow overage greater than $50.
- Limits on the amount your servicer can require you to maintain (no more than 2 months cushion).
- Notice before any escrow shortage payment increase takes effect.
Understanding Escrow Shortages
If your escrow account has a shortage (not enough money to cover upcoming payments), your servicer must notify you and give you options for repayment. You can typically pay the shortage in a lump sum or spread it over 12 months. HIP's mortgage calculator shows estimated monthly escrow amounts, but actual amounts depend on your specific property taxes and insurance.
Loan Servicing Rules
RESPA provides protections when dealing with your loan servicer.
Your loan servicing rights include
- Written response to your qualified written request within 30 days.
- Acknowledgment of your complaint within 5 business days.
- Protection from foreclosure during the first 120 days of delinquency.
- Evaluation for loss mitigation options before foreclosure.
- Accurate and timely posting of payments to your account.
- Proper handling of partial payments.
Qualified Written Request
If you have questions or disputes about your loan, send a "Qualified Written Request" (QWR) to your servicer. They must acknowledge it within 5 business days and respond within 30 business days. During this time, they cannot report negative credit information related to your inquiry.
Servicing Transfers
Your loan may be sold or transferred to a new servicer. Both the old and new servicer must notify you. You have 60 days of protection—payments sent to the old servicer during this period cannot be treated as late.
Enforcement and Remedies
If your RESPA rights are violated, you have options.
You may be entitled to
- Actual damages you suffered as a result of the violation.
- Additional damages up to $2,000 for a pattern or practice of noncompliance.
- Attorney fees and court costs if you prevail in a lawsuit.
- Treble damages (3x actual damages) for certain kickback violations.
Filing a Complaint
If you believe your RESPA rights have been violated, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov/complaint. You may also consult with a real estate attorney about your legal options.
Questions About RESPA and Settlement Costs
Resources to help you understand your rights in the home buying process.
Contact HIP Support
Email: support@hip.example.com
For closing cost questions: closings@hip.example.com
California DRE License: #01845929
NMLS ID: #1107134
Federal Resources
Consumer Financial Protection Bureau (CFPB)
Closing Guide →
HUD Office of Housing
RESPA Information →
Related Policies
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