Real Estate Settlement Procedures Act — Purpose

Quick search by citation: 12 U.S. Code § 2601 - Congressional findings and purpose prev | next (a) The Congress finds that significant reforms in the real estate settlement process are needed to insure that consumers throughout the Nation are provided with greater and more timely information on the nature and costs of the settlement process and are protected from unnecessarily high settlement charges caused by certain abusive practices that have developed in some areas of the country. The Congress also finds that it has been over two years since the Secretary of Housing and Urban Development and the Administrator of Veterans’ Affairs submitted their joint report to the Congress on “Mortgage Settlement Costs” and that the time has come for the recommendations for Federal legislative action made in that report to be implemented. (b) It is the purpose of this chapter to effect certain changes in the settlement process for residential real estate that will result— (1) in more effective advance disclosure to home buyers and sellers of settlement costs; (2) in the elimination of kickbacks or referral fees that tend to increase unnecessarily the costs of certain settlement services ; (3) in a reduction in the amounts home buyers are required to place in escrow accounts established to insure the payment of real estate taxes and insurance; and (4) in significant reform and modernization of local recordkeeping of land title information. ( Pub. L. 93–533, § 2 , Dec. 22, 1974 , 88 Stat. 1724 .) Editorial Notes References in Text This chapter, referred to in subsec. (b), was in the original “this Act”, meaning Pub. L. 93–533 , Dec. 22, 1974 , 88 Stat. 1724 , known as the Real Estate Settlement Procedures Act of 1974 , which is classified principally to this chapter (§ 2601 et seq.). For complete classification of this Act to the Code, see Short Title note below and Tables. Statutory Notes and Related Subsidiaries Change of Name Reference to Administrator of Veterans’ Affairs deemed to refer to Secretary of Veterans Affairs pursuant to section 10 of Pub. L. 100–527 , set out as a Department of Veterans Affairs Act note under section 301 of Title 38 , Veterans’ Benefits. Effective Date Pub. L. 93–533, § 20 , formerly § 19, Dec. 22, 1974 , 88 Stat. 1731 , renumbered § 20, Pub. L. 94–205, § 10 , Jan. 2, 1976 , 89 Stat. 1159 , provided that: “The provisions of this Act, and the amendments made thereby [see Short Title note below], shall become effective one hundred and eighty days after the date of the enactment of this Act [ Dec. 22, 1974 ].” Short Title of 2021 Amendment Pub. L. 116–342, § 1 , Jan. 13, 2021 , 134 Stat. 5134 , provided that: “This Act [amending section 2603 of this title and section 1604 of Title 15 , Commerce and Trade, and enacting provisions set out as a note under section 2603 of this title ] may be cited as …

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