What practice does RESPA aim to eliminate?

RESPA, or the Real Estate Settlement Procedures Act, was enacted to promote transparency and eliminate practices that can lead to inflated costs in real estate transactions. The primary focus of RESPA is to eliminate kickbacks and referral fees that can impact the integrity of the settlement process.

Kickbacks and referral fees are payments made to real estate professionals for referring clients to certain services, such as title insurance or closing services, without providing any actual service in return. These practices can lead to higher costs for consumers, as they can incentivize certain service providers to charge more simply because they are receiving additional income from referrals. RESPA aims to ensure that consumers are informed of the costs associated with the settlement process, and by eliminating kickbacks, it helps to create a fairer and more competitive environment in which consumers can make informed decisions.

The other options, while related to real estate, do not fall under the specific aims of RESPA. For instance, real estate inspections, homeowner insurance requirements, and property tax assessments are aspects of the real estate process but are not directly addressed by RESPA in terms of eliminating unethical financial practices. RESPA specifically targets the financial interactions that can compromise the integrity of real estate transactions.