Under RESPA, which statement is true?

• A. Lenders may force the buyer to use a title company.
• B. RESPA requires the seller to disclose closing costs to the buyer.
• C. RESPA prohibits any closing cost estimates.
• D. A seller is prohibited from choosing a title insurance company for the buyer.

Answer: (D)

RESPA protects a buyer’s right to choose their own settlement service providers, including the title insurer. The seller cannot require or steer the buyer to use a specific title insurance company. This prevents the seller from pushing the buyer toward an in-house or affiliated provider and helps ensure competitive pricing and unbiased service.

Lenders cannot force the buyer to use a particular title company, and RESPA does require disclosures of closing costs and cost estimates to the borrower, so it does not prohibit estimates. That’s why the statement that a seller is prohibited from choosing a title insurance company for the buyer is the accurate reflection of RESPA’s protections.