What is the consequence of failing to comply with the Real Estate Settlement Procedures Act (RESPA)?

The consequence of failing to comply with the Real Estate Settlement Procedures Act (RESPA) primarily includes financial penalties. RESPA is designed to protect consumers by ensuring they receive information regarding the costs of settlement services and by preventing kickbacks and referral fees that could increase the cost of obtaining a mortgage. When a lender or settlement service provider fails to adhere to RESPA regulations, they can be subject to significant financial penalties, including fines and other monetary repercussions imposed by regulatory agencies.

While losing a license to operate can occur in severe cases of non-compliance with various laws, it is not the primary or most immediate consequence of failing to meet RESPA requirements. Similarly, increased interest rates for borrowers or reduced loan amounts are not direct consequences of RESPA violations but could happen due to market conditions or lending practices, which are distinct from the specific compliance requirements outlined in RESPA. Thus, financial penalties stand out as the most relevant consequence tied directly to RESPA violations.