Massachusetts Real Estate License Practice Test

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the Massachusetts Real Estate License Test. Prepare with multiple choice questions and explanations. Ace your exam with comprehensive practice!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What does RESPA stand for and why was it enacted?

Real Estate Settlement Procedures Act; to provide buyers with a cost estimate
Real Estate Settlement Procedures Act; to protect buyers from fraud
Real Estate Service Preservation Act; to regulate agent commissions
Real Estate Settlement Pays Act; to simplify the closing process

The correct answer is: Real Estate Settlement Procedures Act; to provide buyers with a cost estimate

The correct choice identifies RESPA as the Real Estate Settlement Procedures Act. This federal law was enacted primarily to provide transparency in the real estate settlement process, specifically by requiring lenders to provide borrowers with a Good Faith Estimate of settlement costs. This enables buyers to understand and compare the various fees associated with closing a real estate transaction, making it easier for them to budget for these costs and make informed decisions. The act also aims to prevent abusive practices, such as hidden fees, and encourages the fair treatment of consumers in real estate transactions. By mandating clear communication about costs, RESPA helps protect consumers from unexpected charges at closing and promotes competition in the settlement market. This understanding of costs aims to create a more equitable environment for real estate transactions. In contrast, other options either misname the act, inaccurately describe its focus, or present purposes that do not align with the core objectives established by the legislation.