Zusammenfassung der Ressource
TILA/ Reg Z
- Truth in Lending Act
- Protect consumers
by disclosing the
costs and terms of
credit
- Create Uniform
standards for stating
the cost of credit,
thereby envouraging
consumers to
compare the costs of
loans offered by
different creditors
- Two Uniform Standards
Stating the Cost of Credit
- Finance Charge: The calculation of a
loan's finance charge is a process that
invovles determining which of the
many fees associated with a loan's
orgination and closing
- Closed end accuracy
requirements: Charge is
not understated by more
than $100 or The amount
stated is greater then the
amount required to be
disclosed
- Annual Percentage Rate:
Measure of the cost of credit
expressed as a nominal yearly
rate. It relates the amount and
timing of the value received by
the consumer to the amount
and timing of payments made
- Included in the APR, PMI or MIP,
Discount Points and mortgage
borrower fees, origination fees,
processing fees, and underwriting
fees. Many of these are calculated
in the finance charge
- TILE enforces APR accuracy, if it
is not more the 1/8 of one
percentage point above or
below the APR, Open-ended
loans need to be 1/4 of one
percentage point about or below
- Excluded fees, Title, escrow, notary,
appraisal and credit report, and document
preperation fees
- Ensure that
advertising for
credit is truthful
and not
misleading
- Trigger terms
- Finance Charge, Other
charges, Taxes imposed
on credit transactions,
and payment terms
- These terms require to
clearly and
conspicuoulsy include:
Any loan fee that is a
percentage of the credit
limit, An estimate,
stated as a dollar
amount, any periodic
rate used to compute
the finance charge, and
the maximum apr that
may be imposed under a
variable rate plan
- Penalties for criminal
liability may inclde a
fine of up to $5,000
imprisonment for up to
one year, or both a fine
and imprionment
- Prohibition against misleading
terms for closed end loans
- 7 deadly sins
- Misleading advertising of "fixed rates
- misleading comparisons in advertisements
- Misrepresentations about goverment endorsement
- Misleading use of the current lender's name
- Misleading claims of debt elimination
- misleading use of the term counselor
- misleading foreign-language advertisements
- Provide borrowers
with the right to
rescind certain types of
mortgage transactions
- Three Business Day Recission Period:
This interval is intended to give a
borrower the opportunity to reconsider
whether they eant the loan, and the
ability to cancel the loan by simply
providing the lender with timely notice
of cancellation
- Three Year Rescision Period: The three year
rescission period is available to a borrower who
did not receive a notice of the right to rescindn or
accurate TILA disclosures at the time he/she
entered an agreement for a mortgage loan
- ONLY FOR PRINCIPAL DWELLING
- 2 copies must be
sent to each party
of interest
- Foreclosures
can rescind if:
- The loan was originated through a
mortgage broker and the creditor
failed to include the mortgage
broker fee in the finance charge
- The creditor failed to use the
appropriate model form under Reg
Z or a substantially similar notice
- Application: To meet
the deadlines of TILA
an application needs
6 pieces of
information to be
complete
- 1.Name 2. SSN 3. Income 4.
Address of property to
secure the loan 5. Estimated
value of property securing
the loan 6. The Loan
amount sought
- ARMs
- Every ARM gets a CHARM
within 3 days of the loan
application
- CHARM=
Consumer
Handbook on
Adjustable- Rate
Mortgages
- ARMs require a
rate/payment
change
disclosure and
- A disclosure is not
required when the
transaction
involves an ARM
with a term of one
year or less
- Look-back Period:
Number of days prior
to the change date on
which the index value
would be selected
- Range between 15 and
60 days. General rule
requiring 60 day
advance notice
- Initial rate adjustment
- The estimated
interest rate and
payment change
must be calculated
15 business days
prior to the date of
the disclosure
- HELOC Disclosures
- Rention Disclosure
- Availability of disclosed terms
- Risk of Losing the home
- Possibility of unfavorable actions by the creditor