RESPA stands for the Real Estate Settlement Procedures Act and has become a more popular term with the development of the loan modification industry. RESPA is a series of rules which must be followed in real estate transaction including mortgage loans. When these rules are not followed their can be consequences.
Many loan modification companies use this as a sales tool when selling loan modification services. They promise to do a forensic audit of your loan documents to determine if there have been any RESPA violations and they will then use these as leverage to force your lender to modify your loan. This is typically a scam. Even if the company actually does a forensic audit, and even if they do find mistakes, the statute of limitations is usually passed so there is nothing you can even do. Also, are you actually going to spend the money to sue your lender?
RESPA however is still something you should consider. If you live in California and got you loan between 2001 and 2007 then you should look into some remedies for RESPA violations and to find out if you were victim of predatory lending. In California loan modifications are very prevalent because it is a hard hit area and there where many bad loan written in this, the capital of the mortgage industry.
