real estate law · claim

Elements of RESPA

Quick Answer

What are the elements of RESPA?

The Real Estate Settlement Procedures Act (RESPA) is a federal law that requires disclosure of certain costs associated with closing a residential real estate transaction. It aims to eliminate abusive practices in the real estate settlement process, particularly regarding kickbacks and referral fees.

Required Elements

1. Existence of a Transaction

There must be a residential real estate transaction involving a mortgage.

What to prove: It must be shown that a transaction that falls under the definitions of RESPA occurred.

2. Failure to Disclose

The defendant must have failed to disclose the required information about the transaction.

What to prove: Plaintiff must demonstrate that the defendant did not provide the required disclosures as stipulated by RESPA.

3. Incurred Fees or Charges

The plaintiff must have incurred fees or charges that are subject to RESPA requirements.

What to prove: Evidence must show that the plaintiff paid fees for services connected to the settlement that should have been disclosed.

4. Causation

There must be a causal connection between the failure to disclose and the plaintiff's damages.

What to prove: Plaintiff must prove that the non-disclosure of information directly resulted in financial harm.

Burden of Proof

The plaintiff bears the burden of proof by a preponderance of the evidence.

Available Defenses
  • Mistake in Disclosure
  • No Financial Injury
  • Statute of Limitations
Common Fact Patterns
  • A borrower claims they were not informed of all settlement costs during the closing process.
  • A real estate agent receives a referral fee that was not disclosed to the buyer despite being a violation of RESPA.
Exam Tip

Focus on the statutory requirements outlined in RESPA and how they relate to the elements of the claim. Common exam questions may include analysis of cases where disclosures were in dispute.

Key Cases
  • Kirkland v. Burch
  • Jenkins v. Mortgage Electronic Registration Systems, Inc.
  • Culpepper v. Atlantic First Federal Savings Bank

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