RESPA, the Real Estate Settlement Procedures Act, was enacted by Congress in 1974. Its intent was consumer protection by regulating the disclosure of all costs and business arrangements in a real estate transaction settlement process.

An acronym you'll see in relation to RESPA is AfBA, or Affiliated Business Arrangement. One purpose of RESPA is to regulate the referral of business between companies involved in a real estate transaction settlement. An example of an AfBA would be a title insurance company, with a real estate broker as one of the owners, receiving referral title business from that broker's real estate business. These type of relationships are not necessarily illegal, and Congress recognized that they could even bring convenience and/or savings to the consumer if regulated and disclosed.

In 1992, the Department of Housing and Urban Development, HUD, issued Regulation X, which further clarified AfBA's and their permitted involvement in real estate settlement transactions. Though amended slightly in 1996, Regulation X was not changed a lot, and AfBA's are recognized by both RESPA and HUD as legal and useful if regulations are followed and proper disclosure is made to the consumer.