Term
| What is the purpose of the Truth in Lending Act? |
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Definition
| To require lenders to disclose key terms and costs to consumers for credit transactions (mortgage loans) through statements and fair advertising practices. |
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Term
| What four conditions does TILA apply to concerning lenders? |
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Definition
1) Credit is offered to consumers
2) Credit is offered on a regular basis
3) Credit is subject to a finance charge or must be paid in more than four installments
4) Credit is primarily for personal, family, or household purposes. |
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Term
| When does TILA not apply? |
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Definition
| when credit is extended for business, commercial or agricultural purposes. |
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Term
| What type of credit is a mortgage? |
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Definition
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Term
| When must disclosures be made for mortgages? |
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Definition
| Before the closing of the loan (or before the transaction is completed) |
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Term
| What is TILA also known as? |
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Definition
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Term
| What information must be covered in Truth in Lending Statements? |
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Definition
1. APR
2. Finance Charge
3. Amount Financed
4. Total of Payments
5. Total Sales Price |
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Term
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Definition
| The cost of the mortgage expressed in a yearly rate. |
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Term
| What is not included in the finance charge? (I had questions related to this, remember all of them) |
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Definition
1) Points and fees paid by the seller.
2) Application fees charged to all applicants for credit.
3) Fees for preparing deeds or mortgages
4) Fees for title examination, abstract of title, property survey
5) Notary or appraisal fees
6) Recording Fees
7) Well and Septic inspection fee
8) Final inspection fee
9) Termite inspection
10) Flood hazard inspection
11) Amounts required to be paid in escrow or trustee accounts
12) Any escrowed fee or money on reserve for taxes and insurance |
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Term
| What types of insurance are included in the finance charge? |
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Definition
1) Mortgage insurance premiums
2) Accident, Health, or LOI insurance |
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Term
| Within how many days after the application is received must the lender provide a disclosure of information regarding fees covered under TILA. |
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Definition
| 3 days. (I don't think this necessarily has to be the GFE.) |
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Term
| What is a demand feature? |
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Definition
| A feature that allows the lender to require the amount of money due "on demand" |
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Term
| What additional disclosures does TILA require for variable rate loans? |
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Definition
1) The booklet titled Consumer Handbook on Adjustable Rate Mortgages.
2) A disclosure for each variable rate program that interests the consumer.
3) A subsequent disclosure on variable rate transactions in each month that an interest rate adjustment takes place. |
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Term
| Who has the right to rescind the loan? |
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Definition
| Any consumer that has an ownership interest in a primary residence tht is used to secure a loan. |
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Term
| How many copies of the right to rescind notice must be given to the borrower? |
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Definition
| Two copies along with one copy of the disclosure statement. |
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Term
To rescind the loan, the consumer must notify the lender before ______ of the ___ business day after the last of the following:
1. ________
2. ________
3. ________ |
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Definition
midnight,
3rd,
1. consummation of the loan
2. delivery of the right to rescind notice
3. delivery of all disclosures. |
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Term
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Definition
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Term
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Definition
| phrases that represent the most attractive features of a credit plan in the context of an ad. |
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Term
| If any trigger terms are used in an advertisement, what else must be disclosed? (6 things) |
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Definition
1. The cash price of the home.
2. The amount of the down payment required or that none is required, whatever is applicable
3. The number of payments necessary to repay the loan.
4. The amount of the payments.
5. Due dates or period of payments scheduled to repay the debt.
6. The APR of the finance charge. |
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Term
| How many APRs per loan are there? |
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Definition
| one, no matter how many interest rates apply during the term of the loan. |
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Term
| If a consumer orally asks about a credit plan and the costs associated with it, what must the lender do? |
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Definition
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Term
| ON TEST: For how long must a lender keep evidence of compliance with TILA regulations? |
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Definition
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Term
| What could a violating lender face in individual cases? |
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Definition
1) Payment of actual damages
2) Attorney's fees and court costs
3) Statutory damages: Up to 2 times the amount of the finance charge as long as this figure is above $100 and at or below one thousand. |
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Term
| For class action suits, what could violating lenders face? |
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Definition
1) Actual damages
2) An amount ordered by the court with now minimum requirement, up to 500K or one percent of the lenders net worth, whichever is less. |
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Term
| When must a consumer lawsuit begin in accordance with the violation? |
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Definition
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Term
| What other act is mentioned in the TILA chapter? |
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Definition
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Term
| The MDIA is a subpart of what act? |
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Definition
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Term
| What changes are made to TILA by the MDIA? |
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Definition
1) All advance disclosures (GFE and TILA) must be given to the customer before getting any upfront fee except for the credit report.
2) TILA disclosures must be delivered 3 days after application (already the case) AND 7 days before the consummation of the loan (new part)
3) Redisclosure if the APR varies beyond 1/8th percent. |
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Term
| If the APR changes by 1/8 percent, by when must the creditor furnish the corrected disclosures to the consumer? |
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Definition
| No later than 3 business days before the date of consummation. |
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Term
| There are two different definitions of "business day." Why? |
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Definition
| To maintain consistency with RESPA. |
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