What does RESPA prohibit?

The correct choice highlights one of the main purposes of the Real Estate Settlement Procedures Act (RESPA), which is to promote transparency and fairness in the real estate settlement process. RESPA specifically prohibits kickbacks, which are unearned fees paid for referrals, as well as certain types of unreasonable impound accounts that may impose unnecessary burdens on consumers. These provisions are intended to ensure that consumers do not pay more for settlement services than they should and that they are fully informed about the costs associated with their transactions.

By prohibiting these practices, RESPA helps to protect consumers from unscrupulous behaviors in real estate transactions, ensuring a more equitable system. Keeping the costs of settlement services reasonable and transparent is foundational to the consumer trust essential in the housing market.