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The correct interpretation of RESPA is the Real Estate Settlement Procedures Act. This federal law was enacted to help protect consumers during the real estate settlement process, primarily by requiring disclosures that provide transparency about the costs involved in a real estate transaction. RESPA aims to eliminate kickbacks and referral fees that can increase the cost of making a mortgage loan. Additionally, it mandates that consumers receive information about the settlement services they will be using and ensures that they are well-informed about their rights.

Understanding RESPA is crucial for both real estate professionals and consumers, as it establishes standards for handling real estate transactions and promotes efficient practices within the industry. This knowledge plays an essential role in fostering trust and accountability in real estate dealings.