Truth in Lending Act
In the case of a non-numerical clerical error that does not effect the amount paid or received, such as listing the wrong name of a settlement service provider, the creditor has ____ days to send a revised Closing Disclosure.
60 days
Which of the following are Trigger Terms that require additional disclosures a. 20% down payment required b. Attractive financing available c. No closing cost d. No down payment
A
Dodd-Frank Act included a provision that loans must generally be underwritten under an ___________________ rule which has not been implemented by regulations written by the CFPB (Consumer Financiual Protection Bureau)
"ability-to-repay"
The 3 day right of rescission will expire on midnight of the third business day following the last of the following events to occure:
- The consummation (settlement) of the transaction -Delivery of all Truth in Lending disclosures -Delivery of the Notice of Right to Rescind
TILA would NOT apply in any of the following circumstances
- loans to other than natural persons (such as corporations) -Loans for business, commercial, or agricultural purposes -personal loans in excess of $55,800 which are not secured by real ppty
KEY ISSUE TO UNDERSTAND ABOUT APR
- more accurate to compare the APR of two loans, rather than just their nominal interest rates -APR takes into account the fees and charges that are ignored by the nominal interest -Since APR takes these other charges into account, the APR of the loan will almost always be higher than the nominal interest rate of the loan
Truth in Lending Act (TILA)
-1968 -A federal law requiring lenders to provide residential loan applicants with estimates of the total finance charges and the annual percentage rate (APR).
Changes that can trigger a new 3 business day waiting period before loan consummation
-material change to the APR (material change would be any change in excess of 1/8 of 1% (0.125% or 12.5 basis points) for regular loans or 1/4 of 1% (0.25% or 25 basis points) for irregular loans -if loan product is changed or prepayment penalty is added, CD must be revised triggerinig waiting period
Average Prime Offer Rate (APOR)
An annual percentage rate that is based on average interest rates, fees, and other terms on mortgages that are offered to qualified borrowers. The APOR is used as a benchmark rate in identifying high-cost home loans and higher-priced mortgage loans under federal law. Published by the Federal Financial Institutions Examination Council (the FFIEC)
Applies to any compensation for a specific loan application, If the applicant pays any fee (regardless of what that fee is called) that goes directly to the LO, then neither lender nor any affiliates can compensate the LO for that specific loan. The reverse is also true. If the lender pay any compensation to the MLO, the consumer cannot pay any compensation to the MLO
Prohibition Against Split Compensation
In connection with a consumer credit transaction secured by a dwelling, a LO shall not direct or "steer" a consumer to consummate a transaction based on the fact that the originator will receive greater compensation from the creditor in that transaction than in other transactions the originator offered or could have offered to the consumer, unless the consummated transition is in the consumer's interest
Prohibition on Steering
Annual Percentage Rate (APR)
annual cost of credit expressed in percentage terms Computed from the amount financed by determining at what interest rate one would pay the same monthly payment based on the amount financed rather than the stated loan amount
General Description of Business Day
any day the lender's office is open for business
If advertisement states on the APR then the additional disclsoures
are not required
Closing Disclosure (CD) must be received by the borrower
at least 3 business days prior to loan consummation. If not delivered personally it must be placed in the mail or emailed three business days prior to that deadline for a total of six business days
Delivery of LE - Loan Estimate
delivered or mailed no later than three business days after receipt of application Loan cannot be consummated until seven business days after LE was delivered or mailed Borrower can waive these waiting periods only in cases of bona fide personal financial emergencies such as an imminent foreclosure
If two lenders offer the same terms, but one lender offers a higher compensation than the other, it is not a violation of the steering provision to _____________
direct the applicant to the lender offering the higher compensation to the LO
Compensation to the MLO may be a
fixed percentage of the loan amount may be subject to a minimum and maximum compensation amount
Yield Spread Premium (YSP)
form of compensation that a mortgage broker, acting as the intermediary, receives from the original lender for selling an interest rate to a borrower that is above the lender's par rate for which the borrower qualifies.
Qualified Mortgages are considered higher-priced if they
have an APR that exceeds the Average Prime Offer Rate (APOR) by 1.5 percentage points or more for first-lien loans and 3.5 percentage points or more for subordinate-lien loans. Small Creditor and Balloon-Payment GQs are considered higher-priced if they have an APR that exceeds the APOR by 3.5 percentage points or more for both first-lien and subordinate-lien loans
what is a regular loan
have only one loan advance, they have regular payment intervals and regular payment amounts
Revision Requirement would apply regardless of whether the change in the APR has an
increase or decrease
If the MLO charges (and retains) a "processing fee" to the applicant. Whether the MLO actually spent the time processing the loan or not, or if the fee is applied to offset overhead costs, it is considered compensation to the MLO and the lender would
then be prohibited from compensation the MLO
Changes that do not affect APR or the loan product or add a prepayment penalty will still require a revised Closing Disclosure but no
three day waiting period will trigger Example - buyer does final walkthrough, wants to buy fridge and agreement needs to be added to CD but no waiting period required
If the Loan Estimate form or Notice of Right to Rescind were not given to the borrower, the borrower would have the right to rescind the loan for up to
three years
An LO must obtain loan option from a "____________________" of creditor for each type of transaction in which the applicant expressed an interest.
"significant number" -Generally, 3 creditors or more is considered a "significant number" of creditors (lenders) -LOs who regularly do business with than three creditors are NOT required to obtain loan options from all such creditors -LOs who regularly do business with less than 3 creditors must obtain loan option from each such creditor -No loan originator is required to establish a new relationship with a creditor in order to comply with these rules
CALCULATE FINANCE CHARGE - Ima Buyer purchases a home and borrows $100,000 at a fixed rate of 6% for a 30 year term. The monthly payments (including mortgage insurance premiums) are $625 per month. There is a 1% loan origination fee, 2 points, (both of which will be deducted from the loan proceeds), and credit report, appraisal and title insurance fees of $1,000. What is the finance charge of the loan?
$128,000 First, compute the total payments of the loan $625x360 months (30 yrs) = $225,000 Now add the 1% loan origination fee and 2 points (2%) for 3% in additional fees, which come to $3,000 ($100,000x3%) The amount financed will be the $100,000 loan amount less the 3% in fees, a result of $97,000 The finance charge would be the $225,000 total payments less the $97,000 amount financed, a result of $128,000
Disclosures required due to Trigger Terms
- Amount of percentage of the down payment -Repayment terms, which would include the number and amount of payments and any balloon payment -the annual percentage rate and whether it can change
Under ATR (ability-to-repay)., the lender must make a reasonable, good-faith determination that the consumer has a reasonable ability to repay the loan. There are 8 underwriting factors that must be considered in complying with the rule:
- Current or reasonably expected income or assets that the applicant will rely upon to repay the loan -current employment status (or other reliable source of income) -The monthly mortgage payment (perhaps with adjustments for loans where payments can charge) -Any payments on simultaneous loans secured by the same property -Required payments for property taxes, insurance, homeowners association fees and the like -Debts, alimony and child-support obligations -Debt-to-income ratio and/or residual income -Credit history These factors must be verified by a third-party, such as an employer or financial institution, as appropriate. The loan payments used for underwriting purposes may have to be adjusted. Generally, the calculations should be based on substantially equal monthly payments that would fully amortize the loan
For each type of transaction in which the applicant expresses an interest, the LO has to present options that have three specific features. One of the features states: The lowest interest rate without certain specified unfavorable facts must be presented. For any loan other than a reverse mortgage, these unfavorable factors are listed as:
- Negative amortization -A prepayment penalty -Interest only payments -A balloon payment in the first 7 years of the life of the loan -A demand feature (which means the lender could require early repayment of the loan) -Shared equity -shared appreciation
Examples of Trigger terms that would require additional disclosures
-7% financing available -Only a 5% down payment is required -180 easy payments -Payments under $1000 per month
For each type of transaction in which the applicant expresses an interest, the LO has to present options that have three specific features. One of the features states: The lowest interest rate without certain specified unfavorable facts must be presented. For a reverse mortgage, these unfavorable factors are listed as:
-A Prepayment penalty -Shared equity -Shared appreciation
The 3 day right of rescission applies to a mortgage that is:
-A second mortgage -A home improvement loan -A home equity loan -A home equity line of credit (HELOC) -A refinancing of an existing loan from a different lender than the original loan - A "cash out" refinancing of an existing first mortgage to the extend of the increased debt
Trigger terms include...
-Amount or percentage of down payment -Number of payments or period of repayment -Amount of any payment -Amount of any finance charge
TILA requires special disclosures for ARMS. Specifically, borrowers must be give:
-CHARM booklet - Consumer Handbook on Adjustable Rate Mortgages -Loan program disclosure for each type of ARM for which the consumer has expressed an interest -
CHARM Booklet
-Consumer Handbook on Adjustable Rate Mortgages ---prepared by the Federal Reserve Board and Federal Home Loan Bank -A disclosure booklet used to educate consumers on the risks associated with adjustable-rate mortgages.
There are requirements that are unique to various types of QMs
-General QMs must have a DTI ration that does not exceed 43%. The loan qualification must be based on the maximum interest rate permitted during the first five years of the loan term -Small Creditor QMs must be qualified based on the maximum permissible interest rate during the first five years of the loan. In most cases, these loans lose their QM status if they are sold to another creditor within three years of loan origination -Balloon-Payment Qualified Mortgages must have no negative amortization or interest-only payments. The term of the loan must be at least five years and must have a fixed interest rate and periodic payments (other than the balloon payment) that would fully amortize the loan over 30 years or less
A Qualified Mortgage (QM) will be one of four types
-General Qualified Mortgage - can be issued by any type of lender -Temporary Qualified Mortgage- This type of GM can be issued by any type of lender. These loans are either sold to Fannie Mae or Freddie Mac or are insured by the FHA or guaranteed by the VA. Since the ATR rule was first published, Fannie Mae, Freddie Mac, the FHA, the VA and the RHS have all issued their own definitions of Qualified Mortgages which in most cases conform to the definition of Teneral Qualified Mortgage except that VA loans may sometime exceed the 43% maximum DTI Ratio -Small-Creditor Qualified Mortgage - As its name implies this QM can only be issued by "small creditors" --which is generally a lender with under 2 billion in assets (adjusted for inflation) and originates no more than 3000 first-lien closed end mortgage loans in a calendar year -Balloon-Payment Qualified Mortgage - This is available only to small creditors in certain areas which are mostly rural and underserved by major lenders
Lender on ARRM has ongoing disclosure obligation to borrow during the entire time the loan is outstanding. If an ARM occurs, the following disclosures must be made:
-If the interest rate is adjusted, but this does not change the monthly payment, disclosures must be made at least annually. -If the interest rate is adjusted and that results in a revised monthly payment, the disclosure must be made a least 25 calendar days, but no more than 120 calendar days before the revised payment is due **** Disclosures must include -The current and previous interest rates, along with the rate of the underlying index -IF the lender has foregone some rate increase (such as due to an interest rate cap), that must be disclosed -The amount and due date of the revised monthly payment, along with the interest rate which applies to that payment, and the amount due on the loan. If the revised payment could or would result in negative amortization, the lender must disclose the amount of payment required to avoid the negative amortization
For each type of transaction in which the applicant expresses an interest, the LO has to present options that have three specific features. When presenting the interest rate for the three loan options for each transaction, the following rules apply
-If the loan has an interest rate that is fixed for at least the first five years, the initial rate will be used in the disclosure -If the initial rate is not fixed for at least five year, the disclosed rate would be fully-indexed rate at the consummation of the loan, and would not consider any discount or teaser rate -for a step-rate loan, where the rate will automatically be increased at specified intervals, the disclosure should show the highest rate that will apply during the first five years of the loan
Compensation is not based on the transaction's terms or conditions if it is based on,
-LO's overall loan volume (total dollar amount of credit extended or total number of loans originated), delivered to the creditor -The long-term performance of the originator's loans -hourly rate of pay to compensate the originator for the actual number of hours worked -Whether the consumer is an existing customer of creditor or a new customer -A payment that is fixed in advance for every loan the originator arranges for the creditor (ex-$ for every loan arranged for the creditor, or $ for the first 1000 loans arranged and $ for each additional) -The percentage of applications submitted by the LO to the creditor that result in consummated transactions -The quality of the LOs loan files (accuracy and completeness of the loan documentation submitted the creditor -legitimate business expense, such as fixed overhead costs -Compensation that is based on the amount of credit extended
Truth in Lending requires the following info to be disclosed in the Loan Estimate form:
-Loan amount -Interest rate -Monthly principal and interest -any prepayment penalty -Any balloon payment -Annual percentage rate (APR) -Total interest percentage (total interest paid over the life of the loan as a percentage of the loan amount) -Whether the loan is assumable -Estimated escrow payments -Mortgage insurance premiums
KEY TILA Terms - Key things that play into TILA
-Nominal Interest Rate -Loan points or discount points -Finance charges -Amount financed -Annual Percentage Rate (APR)
In the event of foreclosure, borrower has the right to rescind the loan in any of the following circumstances
-Original disclosure of the finance charge did not include a mortgage broker's fee that should have been disclosed -lender did not proved the required Notice of Right to Rescind -Finance charge was understated by more than $35
The Notice of Right to Cancel a/k/a Notice of Right to Rescind must disclose the following:
-Rescission period -The fact that the lender will retain or acquire a security interest in the ppty -The person's right to rescind (cancel) the transaction -The procedure for doing so -The name and place of business
FINANCE CHARGE will include the following
-The interest costs of the loan -Loan origination fees -Loan points and discount points -Mortgage insurance premiums
When presenting the various loan options, the loan originator bases the disclosures on the loans for which the applicant "is likely" to qualify. The Official Interpretation regarding this requirement includes the following requirements
-The loan originator's belief that the consumer likely qualifies should be based on information available to the loan originator at the time the loan options are presented -In making this determination, the loan originator may rely on information provided by the consumer, even if it subsequently is determined to be inaccurate -...a loan originator is not expected to know all aspects of each creditor's underwriting criteria. But pricing or other information that is routinely communicated by creditors to the LO, for example rate sheets showing creditors' current pricing and the required minimum credit score or other eligibility criteria
All QM - Qualified Mortgages must meet the following criteria:
-There may be no negative amortization or interest-only payments associated with the mortgage -Loan terms may not exceed 30 years -Total points and fees cannot exceed 3% of the loan amount (except for loans under $107747 which have higher permissible fees
FINANCE CHARGE for a mortgage will NOT include
-any application fee which is charged whether or not the credit is extended, if this fee is charged to all applicants -Title fees, such as property surveys and title insurance premiums -Credit report, property inspection, legal and appraisal fees
Truth in Lending Act History
-enacted in 1968 as part of the Consumer Credit Protection Act -modified and amended numerous times -Primary purpose of Act was to provide meaningful disclosures of terms of credit so borrows could more accurately determine actual costs of credit -TILA was implemented by the Federal Reserve System through Regulation Z -The rulemaking and enforcement authority is now under the Jurisdiction of the Consumer Financial Protection Bureau
The 3 day right of rescission does NOT apply to
-first mortgages used to finance the purchase and/or construction of a residence -The refinance of an existing first mortgage by the same lender as that of the original loan. This exemption only applies if the refinancing does not increase the loan balance, meaning that it is not a "cash-out refinancing
Material change to APR for regular loan is
-material change to the APR (material change would be any change in excess of 1/8 of 1% (0.125% or 12.5 basis points) for regular loans
An ARM Loan Program Disclosure must include
-method of determining the interest rate (index plus Margin) -Information on any discounted rates and their duration -The adjustment periods of the loan (how often the rate can be changes) -Whether the loan can have negative amortization and any caps on negative amortization -An example of how changing interest rates effect the payments of a sample $10,000 loan, using either historical data for the past 15 years or projected into the future, assuming interest rates rise at the maximum levels permitted under the specific plan -A statement to the effect that the borrower should ask about the current index rate and the margin
Examples of phrases that would not trigger the additional disclosures in advertising
-no down payment -FHA loans available -Attractive financing available -no closing costs
What are Loan points
-they amount to a prepaid interest charge. -always expressed as a percentage -Example: 2 points charged on a loan of $100,000 would be $2000 ($100,000x2%).
A creditor may offer the LO ________ percentage of the amount of credit extended for all loans the originator arranges for the creditor, but no less that $1000 or greater then $5000 for each loan
1 percent
A creditor may NOT offer a loan originator _____ percent of the amount of credit extended for loans of $300,000 or more, ____ percent of the extended for loans between $200,000 and $300,000 and ___ percent of the amount of credit extended for loans of $200,000
1 percent 2 percent 3 percent
TILA applies to each individual or business that offers or extends credit when four conditions are met:
1. the credit is offered or extended to consumers 2. the offering or extension of credit is done regularly 3. the credit is subject to a finance charge or is payable by a written agreement in more than 4 installments 4.the credit is primarily for personal, family, or household purposes ** would apply to most residential mortgages, whether for purchase or refinance. Including second homes and refinances of second homes
For each type of transaction in which the applicant expresses an interest, the LO must present the loan option which offers the following three features:
1. the lowest interest rate 2. the lowest interest rate without certain specified unfavorable factors 3. the loan with the lowest total dollar amount for origination points or fees and discount points While the rule refers to three different loan options for each type of transaction, it goes on to state that if a loan meets two or more of the standards (lowest rate, lowest rate without unfavorable factors, and lowest fees and points), the standard is met even if three loan options are not presented. The preamble to the rule explicitly states that if one loan option meets all three tests, then presenting just that loan option is sufficient
what is a basis point
1/100 of 1 %. 100 basis points = 1%. So 50 basis points is .5%
Material Change to APR for Irregular Loan is
1/4 of 1% (0.25% or 25 basis points) for irregular loans
When a loan is subject to the right of rescission, the lender must provide anyone with an interest in the subject property with ________ copies of a document that can be called either a Notice of Right to Cancel or Notice of Right to Rescind.
2 Copies Example: both spouses must be give two copies of the document even if only one spouse is named in the promissory note. If the notice is sent electronically in conformance with the E-SIGN Act, only one copy is required.
TILA: Rescission rights give borrowers the right to rescind (cancel) a loan under various circumstances. There is a _______ day right of the recession that applies
3 day right of rescission
If the Closing Document lists the wrong address the lender would have ___ days to send a revised Closing Disclosure
30 days
If within 30 days after consummation an error is discovery that changed the amount paid by the consumer from what was previously disclosed, the creditor has _____ days from the discovery to deliver or mail a revised Closing Disclosure
30 days This would occur if the actual settlement costs varied from what had previously been disclosed.
The 7 business day consummation rule, the 3 business day consummation rule and the Closing Disclosure use a "precise definition" of business days, which is
Any day other than Sundays and holidays
Third-Party fees would not be considered compensation if they are "bona fide and reasonable." Any mark up of these costs would be considered compensation paid by the applicant. EXAMPLE
Assume an LO charge the consumer a $400 app fee that included $50 for a credit report and $350 for an appraisal. Assume the $50 is the amount the creditor pays for the credit report. At the time the LO imposes the application fee on the consumer, the LO is uncertain of the cost of the appraisal because the originator may choose from appraisers that charge between $300 to $350 for appraisals. Later, the cost for the appraisal is determined to be $300 for the consumer. In this case, the $50 difference between the $400 app fee and the actual $350 cost for the credit report and appraisal is not deemed compensation ---even though the $50 is retained by the LO
Which of the following is NOT one of the additional disclosures if the "Trigger Terms" are met? a. APR b. AMount of down payment c.List of credit counselors provided d. Repayment Terms
C
TILA is under what rulemaking and enforcement authority?
CFPB - Consumer Financial Protection Bureau
Each of the following statement in an advertisement would be considered a "trigger term, " EXCEPT a. 6% financing is available b.No down payment c.180 easy payments d.Payments as low as $1000
D
What are discount points?
Discount points are used to adjust the price of a loan. ~~Points are charges based on a percentage of a loan and can include a loan origination fee. One discount point reduces the interest rate by approximately .25%.
Loan Points are _____ percent of loan amount
Each point is 1% if loan amount
The Loan Estimate uses what definition of a business day
General - day the lenders office is open
SAMPLE calculation of FINANCE CHARGES HOW TO
Ima Buyer purchases a home and borrows $100,000 at a fixed rate of 6% for a 30 year term. The monthly payments (including mortgage insurance premiums) are $625 per month. There is a 1% loan origination fee, 2 points, (both of which will be deducted from the loan proceeds), and credit report, appraisal and title insurance fees of $1,000. What is the finance charge of the loan? First, compute the total payments of the loan $625x360 months (30 yrs) = $225,000 Now add the 1% loan origination fee and 2 points (2%) for 3% in additional fees, which come to $3,000 ($100,000x3%) The amount financed will be the $100,000 loan amount less the 3% in fees, a result of $97,000 The finance charge would be the $225,000 total payments less the $97,000 amount financed, a result of $128,000
Notice of Right to Cancel
In a refinance transaction on a primary residence, the borrower gets three business days (not including Sundays and some holidays) from the day they sign loan documents to cancel the loan if they want. This is a law and cannot be waived.
Loan points accomplish which of the following?
Increase the yield to the lender
Bona Fide
Latin for :Good Faith" Genuine Real
No fees or charges can be collected until the _____________ has been delivered or mailed, except for bona fide and reasonable fees for credit reprts
Loan Estimate
Loan originators are not subject to any _______ number of lenders they represent
Minimum
In connection with the consumer credit transaction secured by a dwelling, no loan originator shall receive and no person shall pay to a loan originator, directly or indirectly, compensation in an amount that is based on any of the transactions' terms and conditions
Regulation Z - Prohibited Compensation
Trigger Terms
Specific credit terms that may not be advertised unless the advertisement includes other detailed information.
E-SIGN ACT
The Electronic Signatures in Global and National Commerce (E-Sign) Act makes contracts (including signatures) and records legally enforceable regardless of the medium in which they are created.
During the rescission period
The lender must not advance or disburse any funds until this rescission period has expired. If loan is rescinded, borrower is not responsible for the loan or any finance charge associated with the loan Borrower my waive this right of rescission, but only in the case of a bona fide personal emergency, such as a pending foreclosure
TILA states that if any _____________ are included in an advertisement, then the advertisement is required to include a number of additional disclosures
Trigger Terms
Up-Front Mortgage Insurance Premium (UFMIP)
Up-front mortgage insurance (UFMI) is an additional insurance premium of 1.75% that is collected on Federal Housing Administration (FHA) loans. This insurance money protects the lender in case the borrower defaults on his mortgage payments. UFMI can be paid at the time the loan closes or rolled into the mortgage payments. It is in addition to ongoing mortgage insurance premium payments.
Assume an LO charge the consumer a $400 app fee that included $50 for a credit report and $350 for an appraisal. Assume the $50 is the amount the creditor pays for the credit report. At the time the LO imposes the application fee on the consumer, the LO is uncertain of the cost of the appraisal because the originator may choose from appraisers that charge between $300 to $350 for appraisals. Later, the cost for the appraisal is determined to be $300 for the consumer. In this case, the $50 difference between the $400 app fee and the actual $350 cost for the credit report and appraisal is not deemed compensation ---even though the $50 is retained by the LO
Using same example - the $50 difference would be compensation if the appraisers from whom the LO chooses charge fees between $250-$300
Settlement cannot occur until both the 3 business day and 7 business day requirements have been met. Are Saturdays considered business days for this rule?
Yes
The Dodd-Frank Act and the regulations state that if a lender makes a loan without regard to the applicant's ability to repay the loan the borrower may seek
actual damages, statutory damages, costs, and attorneys' fees, and special damages equal to the finance charges and fees incurred over a period of up to three years
Credit transaction
between two parties creditor/lender supplies money, goods, services, or securities in return for promised future payment by the other debtor/borrower
Lenders ensure they are not in violation of the ability-to-repay(ATR) rule by
complying with the requirements to qualify the loan as a "qualified mortgage"
nominal rate
is the interest rate specified in the promissory note. Rate at which the monthly payments are computed
Amount Financed
is the loan amount plus any fees financed by the lender (Such as the UFMIP in an FHA loan) minus any fees deducted from the loan amount, such as discount points Leads up the APR
What is an irregular loan
loans that have multiple loan advances or amounts, such as seasonal loan payment variations, which are rate
Loan originators are no required to direct applicant to the lender which offers________ to the loan originator, although if they do so, they are assured that they are not in violation of the prohibition against steering
lowest compensation
DISCOUNT POINTS are fees paid in advance to
reduce the nominal interest rate expressed as a percentage
If compensation is based on a proxy for the loan terms
that cannot be used to provide a higher of lower compensation
Safe Harbor Provision
that if the loan originator follows these rules, there is the presumption that steering has not occurred. These Safe Harbor provisions include the following provision: -separate disclosures for each "type of transaction" in which the applicant expresses an interest. They list 3 categories of loans: **loans where APR cannot increase after consummation of the loan (fixed rate loans) **Loans where the APR may increase after consummation (ARMs) **Reverse mortgages ---Point above means if app is not considering a reverse mortgage, no disclosures are required. Similarly, if a particular client is not interest in ARMs no disclosures are then required
If an advertisement mentions a specific interest rate for a loan, it must also state
the APR and the APR must be displayed as conspicuously as the nominal interest rate
Compensation not applicable to any specific loan, such as a salary or bonus for the total number (or loan volume) of loans produced would not violate
the fee splitting provision
A suit for damages my be possible if the required disclosure of the finance charge is understated by
the greater of 0.5% of the credit transaction or $100 (whichever is greater)
