What does RESPA ensure for borrowers?

The Real Estate Settlement Procedures Act (RESPA) is designed to protect consumers in the real estate market, particularly during the home buying process. One of its key provisions is that it requires lenders to provide borrowers with a loan estimate, which outlines the expected settlement costs associated with the mortgage. This loan estimate must be delivered to the borrower within three business days after they submit a loan application, giving the borrower a clearer understanding of the financial obligations they will face.

Providing a loan estimate helps borrowers compare different loan offers, promoting transparency in the lending process. It enhances the ability of borrowers to prepare financially for the purchase and helps them make informed decisions regarding which loan best fits their needs. Other options listed do not fall under the purview of RESPA; for instance, immediate access to credit reports, ensuring loan approvals, or fixing interest rates are not guarantees made by RESPA. Therefore, the correct choice reflects the act's emphasis on transparency in settlement cost disclosures.