Which is the primary law that affects mortgage loan closings?

The primary law that affects mortgage loan closings is the Real Estate Settlement Procedures Act (RESPA). This federal law was enacted to ensure transparency in the settlement process, protecting consumers from abusive practices. RESPA requires that borrowers receive disclosures about the costs of their mortgage transactions and prohibits kickbacks and referral fees that can inflate the cost of settlement services.

By mandating clear communication and transparency about all fees involved in the closing process, RESPA plays a crucial role in helping consumers understand what they are paying for and ensuring that they have the information needed to make informed decisions. This directly influences how mortgage loan closings are conducted and provides numerous protections to buyers and borrowers in the closing process.

In contrast, while the Truth in Lending Act (TILA) also has implications for mortgage transactions by ensuring consumers are informed about the terms and costs of credit, it does not specifically focus on the closing process as heavily as RESPA does. The Equal Credit Opportunity Act (ECOA) deals primarily with discrimination in lending practices, and the Home Mortgage Disclosure Act (HMDA) focuses on collecting data about mortgage lending patterns, which, while important, do not directly regulate the closing process.