What type of loan is primarily regulated under the Real Estate Settlement Procedures Act?

The Real Estate Settlement Procedures Act (RESPA) is primarily focused on residential mortgage loans. This legislation aims to provide borrowers with better transparency and understanding of the costs associated with closing a mortgage transaction. RESPA mandates that borrowers receive specific disclosures about the terms and costs of their mortgage loan, which includes information on settlement services, the Good Faith Estimate (now replaced by the Loan Estimate), and the Closing Disclosure.

Residential mortgage loans are specifically governed by RESPA because the act addresses issues related to home purchases and refinancing, emphasizing consumer protection during the home buying process. By requiring clear disclosures, RESPA helps ensure that borrowers can make informed decisions about their mortgage options and understand any fees or potential conflicts of interest related to the settlement process.

In contrast, personal loans, home equity loans, and auto loans are not primarily governed by RESPA. Personal loans and auto loans do not involve the real estate transaction directly, while home equity loans can fall under different regulations since they might not necessarily be considered "residential mortgage loans" in the same context as primary mortgages. Thus, residential mortgage loans are the focus of RESPA, making it the correct answer.