Which service restriction does RESPA impose on escrow accounts?

The correct answer highlights that RESPA, or the Real Estate Settlement Procedures Act, sets specific guidelines regarding the handling of escrow accounts, particularly emphasizing limitations on the amount that can be held in such accounts. Under RESPA, lenders are not permitted to require a borrower to maintain an escrow balance that exceeds certain thresholds. Typically, this limit ensures that borrowers are not required to prepay excessive amounts for property taxes and insurance, thereby protecting consumers from over-escrowing.

This aspect of RESPA serves to promote transparency and fairness in the real estate transaction process. Consumers should only have to set aside what is necessary for their impending obligations, ensuring they are not unduly burdened with inflated escrow requirements.

Other choices may reference different aspects of escrow accounts but do not align with the specific limitations imposed by RESPA on the funds held in escrow accounts. For instance, while escrow disclosures and management are indeed regulated, the core service restriction pertaining to the collection amounts stands out definitively in the context of RESPA's provisions.