Truth in Lending Act TILA (Grupo 5) Parte 2

For Closing Disclosures, the record retention period is:

5 years

Prepaid finance charge

Prepaid finance charge means any finance charge paid separately in cash or by check before or at consummation of a transaction, or withheld (retenido) from the proceeds (fondos) of the credit at any time.

Loans Covered by the right of rescission

Principal residence refinances by other than original creditor. Principal residence non-purchase money liens, e.g., HELOCs Most consumer credit loans (hard money loan)

Pay off statement

Provide a clear disclosure for a borrower on the total amount they must pay off to close the loan A lender or servicer may not charge a fee for providing borrowers with a payoff statement on a high-cost mortgage. Lender can charge fee only if is send by fax or courier but fee must be comparable to the non-high- cost mortgage and before doing so, lender must show the lender that there are way to get it for free After providing 4 pay off statement for free during a year lender may charge a fee for an additional pay off statement.

Pyramiding

Pyramiding of late fees is a situation where a member (who has been previously charged a late fee) pays the current amount due on a loan without the prior month's late fee included, and the payment is applied to the late fee first, leaving an overdue balance on the current month payment, resulting in another late fee

prepaid

However, in order for these finance charges or any other finance charges to be considered prepaid, they must be either paid separately in cash or check or withheld (retenido)from the proceeds.

How is APR calculated?

The APR must be determined under either the -Actuarial method, -or the United States Rule method.

Creditor

a person who believes that he will be paid back the money that he loaned (prestado). Is a lender (person or company) who regularly extends consumer credit, such as real estate loans that are secured by a dwelling.

Demand Clause

a right that permits the lender to demand prepayment of the loan

TILA-RESPA Integrated Disclosure Rule (TRID)

amended Regulation Z as well as Regulation X. Regulation X implements the Real Estate Settlement Procedures Act (RESPA). The TRID rule provides the new Loan Estimate and Closing Disclosure forms that are required for most closed-end consumer mortgage loans. The effective date for TILA-RESPA Integrated Disclosure rule was October 3, 2015.

Downpayment

an amount, including the value of property used as a trade-in, paid to a seller to reduce the cash price of goods or services purchased in a credit sale transaction.

Mortgage-related obligations

are expected property taxes, premiums for mortgage-related insurance required by the creditor, and similar expenses.

Section 32 Triggers

average prime offer rate (APOR) exceeds comparable Treasury securities points and fees exceed a specified percentage of the total loan amount or a dollar threshold. The APR will exceed the average prime offer rate (APOR) by: • more than 6.5 percentage points for first-lien transactions • more than 8.5 percentage points for first-lien transactions where the dwelling is personal property and the loan amount is less than $50,000; or • more than 8.5 percentage points for subordinate-lien transactions.

clear and conspicuous disclosure

e means that the required information is disclosed with equal prominence (importancia)and in close proximity to the advertised rates or payments triggering the required disclosures.(declaraciones,).

A clear and conspicuous disclosure .

e means that the required information is disclosed with equal prominence and in close proximity to the advertised rates or payments triggering the required disclosures.(declaraciones,).

Mortgage -related obligations

expected property taxes premiums for insurance required by creditor similar expenses.

loans with exemption to the higher-priced mortgage loan escrow requirement

first-lien higher-priced mortgage loans made in 'rural' or 'underserved' areas.

Late Fees

for a high-cost mortgage may not exceed 4% percent of the amount of the payment that is past due.

Acceleration of Debt. (High-Cost Mortgage)

high-cost mortgages cannot include a term that allows the creditor to accelerate the debt and to demand payment of the entire loan balance, except under the following circumstances: Fraud or misrepresentation on the part of the borrower •Consumer's failure to meet the repayment terms of the lending agreement, or •Any action or inaction of the borrower that affects the creditor's security for the loan.

The 10 legal holidays

include New Year's Day, the birthdays of George Washington and Martin Luther King, Jr., Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.

General Definition. "business day "

is a day on which the lender's offices are open to the public for carrying out substantially all of its business functions. (Used for timing the delivery of the Loan Estimate.)

Closed-end credit

is a loan or extension of credit in which the proceeds are dispersed in full when the loan closes and must be repaid, including any interest and finance charges, by a specified date. It contains rules on disclosures, treatment of credit balances, annual percentage rate calculations, rescission rights, and advertising.

Dodd-Frank Act

the primary regulatory response to the financial turmoil that contributed to the Great Recession

TILA -RESPA Application definition:

the submission of a borrower's financial information for the purposes of obtaining an extension of credit. For loan applications submitted in the anticipation of obtaining a

Consummation

the time that a consumer becomes contractually obligated on a credit transaction.

Section 32 triggers when Point and fees exceeds:

• 5% of the loan amount for loans greater than $21,032; or • For loans of less than $21,032, the lesser of 8% of the loan

Examples of Prepaid Finance Charges

• Buyer's points. • Service fees. • Loan fees. • Finder's fees. • Loan-guarantee insurance. • Credit-investigation fees

Higher-Priced Mortgage Loans Exempt from Escrow Accounts

• Initial construction of a dwelling • Bridge loan with a term of 12 months or less • Reverse mortgage subject to §1026.33 • Home equity line of credit subject to

An advertisement that has "triggering terms" must include the following terms:

• The amount or % of down payment; • Terms of payments, reflecting the repayment obligation over the full term of the loan. • Any ballon payment -Annual percentage Rate and if this will increase. if an advertisement is for credit secured by a dwelling, if the annual percentage rate (APR) is disclosed in the advertisement, no other disclosures are required.

Person

PERSON means a natural person or an organization, including a corporation, partnership, proprietorship, association, cooperative, estate, trust, or government unit.

Points and Fees for High-Cost Mortgages

Points and fees calculations for high-cost mortgages depend upon whether the transaction is closed end or open end.

What is a finance charge?

"the cost of borrower credit as a dollar amount. It includes any charge payable directly or indirectly by the borrower and imposed directly or indirectly by the lender as an incident to or a condition of the extension of credit." IN REAL ESTATE, the finance charge does NOT include: -fees for appraisals or credit reports, -title insurance, -notary services, -o preparing loan-related documents, such as deeds or mortgages. This are not finance charges; -Application fees -Sellers points -fees for participation in credit card -Charges for late payment. -Charges for exceeding credit limit o for delinquency -Charges bc the institution paid items that overdraw an account.

Trigger terms

* % of downpayment * # or period of payments * amount of any payment * amount of any finance charge

TILA amendments 1970-1994 TILA is implemented by Reg. Z

-1970 Prohibit unsolicited credit cards -1982 Garn-St. Germain Act -1988 Reg Z to include adjustable rate mortgage loan disclosures. -1988 Home Equity Loan Consumer Protection Act (HELCP) for "open-end home equity lines of credit" applications, HELCP required lenders to disclose the terms, rates and conditions. -1994 Home Ownership and Equity Protection Act (HOEPA) protects people with High-cost hoe income mortgage. protects against abusive lending practices by restricting loan terms and features

TILA amendments 2000-2013

-2007 Amendments of Reg Z simplify the regulation and provide guidance on the electronic delivery of disclosures with E-Sign Act 2008-Housing and Economic Recovery Act deals with housing finance reformed and foreclosure prevention *Division A =HOUSING FINANCE REFORM Title IV- Home for homeowners Title V- SAFE *Division B= FORCLOSURE PREVENTION Title V Mortgage Disclosure Improvement Act-ensure the clietn get disclosures earlier in de process. -2009 The Helping Families Save Their Homes Act TILA requires notifying consumers of the sale or transfer of their mortgage loans. -2010 Title XIV of the Dodd-Frank Act (Mortgage Reform and Anti-Predatory Lending Act) provisions of Reg. Z including originator compensation, the integrity of the appraisal process, underwriting requirements, and qualified mortgage provisions, to name a few. -2013 TILA-RESPA Integrated Disclosure Rule amended by regulation Z and Reg. X : Loan Estimate and Closing Disclosures are required for most closed-end consumer mortgage loans.

Prohibited Advertising Practices

-Lying that payment for loan are fixed when they can vary over time. -Advertise a product that is not available for the full term of the loan. -Advertise false programs, or government-supported or sponsored loans. -lying about who is the mortgage lender -Making claims of debt elimination when the loan is just a merely replace of one debt obligation with another. -Creating a false impression that the mortgage broker or lender is a "counselor" for the consumer -Advertise in a foreign language information like "low introductory teaser rate" while providing required disclosures in English.

Loans Exempt from the Right of Rescission no tienen derecho de anulacion

-Residential mortgage transactions to purchase or construct a principal dwelling, whether considered real or personal property • Principal residence refinanced by original creditor, with no cash out (retiro de dinero).

TILA requires creditors or lenders to:

-To state de cost of borrowing in a common language -To state maximun interes rate in a variable rate contracts secured by dwellin -To inform the consumer the maximun interes rate that may apply during the term of the loan.

Mortgage (hipoteca prestamo)

A loan to purchase a home or other real estate

Elements in the Application in accordance with Regulation Z

1. Borrower's name 2. Borrower's monthly income 3. Borrower's social security number to obtain a credit report 4. Property address 5. Estimate of the value of the property 6. Mortgage loan amount A lender is free to collect additional information, but once it has received the six pieces of information set forth in Reg. Z, it will be deemed to have received an application for Reg. Z purposes.

Examples of Finance Charges

1. Interest, time price differential, (diferencia de precio por tiempo) and any amount payable under an add-on or discount system of additional charges. 2. Service, transaction, activity, and carrying charges (cargos de envio o flete). 3. Points, loan fees, assumption fees, finder's fees, and similar charges. 4. Appraisal, investigation, and credit report fees. 5. Premiums or charges for any guarantee or insurance protecting the lender against the borrower's default or other credit loss. 6. Charges imposed on a lender by another person for purchasing or accepting a borrower's obligation, if the borrower is required to pay the charges in cash. 7. Premiums or charges for credit life, accident, health, or loss-of-income insurance, 8. Premiums or charges for insurance against loss of or damage to property, or against liability 9. Discounts to induce payment by a means other than credit. 10. Charges or premiums paid for debt cancellation or debt suspension coverage

Charges That May be Excluded from the Finance Charge

1. Voluntary credit insurance premiums (an a mount to be paid for a contract of insurance) 3.Voluntary debt cancellation or debt suspension fees 4. Telephone purchases

Regulation Z applies to businesses that extend credit if which of the following conditions are met? (regulation Z is designed to protect consumers against misleading lending practices).

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, (El crédito está sujeto a un cargo financiero o se paga mediante un acuerdo escrito de más de 4 cuotas) 4. The credit is primarily for personal, family, or household purposes.

How long the lender must retain evidence of compliance with Regulation Z?

2 years

When and Which disclosures a borrower must receive if his loan meets the specified requirements? and

3 BUSINESS DAYS before loan is finalized BORROWER MUST GET: -TILA disclosures that the borrower must receive no later than the closing of the loan -Notice stating that the loan need not be completed even though they have signed the loan application and received the required disclosures. -The APR, The regular payment amount (including any balloon payment when the law permits balloon payments), -The loan amount. -Credit insurance premiums, if there are included must be stated -For variable rate loans, disclose that the rate and monthly payment may increase and state the amount of the maximum monthly payment.

How any days after receiving the Section 32 disclosures does a borrower have to decide if he wants to sign the loan agreement?

3 business days

How long is the record retention period for mortgage loans ?

3 years after the date of consummation of a covered transaction,

How long lenders and loan originator organizations must retain records related requirements for mortgage loan originator compensation and the agreements of those payments?

3 years after the date of payment.

Repayment Ability for High-Cost Mortgages

A creditor (prestamista) extending mortgage credit subject to a Section 32 must not make such loans based on the value of the consumer's collateral without regard to the consumer's repayment ability at loan consummation, including mortgage-related obligations. A creditor, in determining a consumer's repayment ability, must verify the income or assets,(bienes o activos) including expected income and assets that it relies on by using tax returns, payroll receipts, financial institution records, or other third party documents that provide reasonably reliable evidence of the consumer's income or assets. Additionally, a creditor must verify the consumer's current obligations.

Financing points and fees

A lender that extends credit under a high-cost mortgage may not finance charges that are required to be included in the calculation of points and fees. However, credit insurance premiums or debt cancellation or suspension fees that are required to be included as points and fees will not be considered financed by the lender when they are calculated and paid in full on a monthly basis.

Lien (gravamen o derecho de retencion)

A lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation.

Prohibited or banned Features on High-Cost Mortgages

Balloon Payments. are prohibited on an amortized loan with less than five years. Bridge loans for less than one year are exempt. Negative Amortization. A loan cannot have a payment schedule with regular periodic payments that cause the principal balance to increase. Advance Payments. A loan cannot have a payment schedule of more than two periodic payments and pays them in advance from the proceeds (fondos o ganancias) Increased Interest Rates. A loan cannot have an increase in the interest rate after a borrower defaults. Interest Rebates. For rebates (devoluciones o bonificaciones) of interest arising from a loan acceleration due to default, the refund cannot be calculated by a method less favorable than the actuarial method as defined by HUD,

Closed end credit (Installment credit)

Closed-end credit means consumer credit other than "open-end credit" as defined in this section.

Who implements fiscal policy?

Congress

Dwelling

Dwelling means a residential structure that contains one to four units, whether or not that structure is attached to real property. The term includes an individual condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence. Mobile homes, boats, and trailers are dwellings if they are in fact used as residences, just as are condominium and cooperative units. Recreational vehicles, campers, and the like not used as residences are not dwellings.

Deed of Trust

Escritura de fideicomiso

Higher Priced Mortgage Loan

Exceeds APOR by 1.5% for 1st lien; 2.5% for jumbo loans; 3.5% for 2nd liens

High Cost Mortgages Prepayment Penalties.

Except as allowed under §1026.32(d)(7), high-cost mortgages cannot have prepayment penalties.

how long does a lender have to retain evidence to show compliance with the minimum standards for loans secured by a dwelling?

For 3 years

Restrictions on Higher-Priced Mortgage Loans

Higher-priced mortgage loans are subject to restrictions regarding repayment, prepayment penalties, and escrow accounts. Repayment Ability. A creditor shall not extend credit based on the value of the consumer's collateral without regard to the consumer's repayment ability as of consummation. Prepayment Penalties * after 2 years period following consummation.(despues de que pararon dos años de haberse consumado no se aplica el penalty). *si se aplica penalty if the money comes from a refinancing of the same creditor. *si se aplica si the payment can change during the first 4 years of the loan term. * si se aplica when the consumer debt at consumation exceed 50% of the his income. Escrow Accounts for Property Taxes and Insurance. Lenders must establish an escrow account for payments when the loan is a first lien that secures the borrower's principal dwelling.

Accuracy Tolerances The disclosed APR on a closed-end transaction is accurate for:

In regular, irregular and mortgage transactions, if the APR is within one-eighth 1/8 of 1 percentage point for regular transactions or one-quarter 1/4 of 1 percentage point for irregular transactions

What is a higher-priced mortgage loan ?

Is a closed-end mortgage loan secured by the consumer's principal dwelling with an APR that exceeds the average prime offer rate for a comparable transaction. The threshold is 1.5 or more percentage points for first lien loans or 3.5 or more percentage points for junior secondary or second lien loans.

High Cost Mortgage or Section 32 Mortgages

Is a consumer credit transaction secured by a consumer's 1-4 unit principal dwelling, including purchase and non-purchase money closed-end credit transactions and HELOCs that meets certain thresholds. A loan that meets or exceeds one or more of several thresholds set forth under the federal Home Ownership and Equity Protection Act (HOEPA). High-cost mortgages are subject to specific borrower education and disclosure requirements, as well as strict restrictions on loan terms that can be used.

Average Prime Offer Rate

Is an estimate of the rate that people with good credit pay for a similar first mortgage.

Annual Percentage Rate. (APR)

Is the relative cost of credit expressed as a yearly rate. Or cost of credit expressed as a yearly percentage. Is the relationship between the total finance charge to the total amount financed.

pyramid

Lenders are also prohibited from 'pyramiding' late fees—that is, charging late payments if any delinquency is attributable only to a late payment charge that was imposed due to a previous late payment, and the payment otherwise is considered a full payment for the applicable period (and any allowable grace period).

High-Cost Mortgage Pre-loan Counseling

Lenders that originate high-cost mortgages must receive written Certification of Counseling that the borrower has obtained counseling on the advisability of the mortgage from a counselor approved by HUD, or state housing finance authority Counseling must occur after the borrower receives a good faith estimate or initial TILA disclosure required by section Finally, a lender is prohibited from steering a borrower to a particular counselor.

Refinancing Within One Year (High-Cost Mortgage)

No HOEPA loan can be refinanced within 12 months of the initial extension of credit unless the refinancing is in the borrower's (prestatario) interest. The purpose of this prohibition is to prevent "loan flipping

open-end credit credito abierto o de duracion indefinida

Open-end credit is a pre-approved loan between a financial institution and borrower that may be used repeatedly up to a certain limit and can subsequently be paid back prior to payments coming due.

Which are another names for open-end-credit?

Open-end credit is also referred to as a 'line of credit' or 'revolving line of credit'. linea de credito renovable 3 names same meaning *open-end-credit *line of credit *revolving credit

Open-end credit

Open-end credit means consumer credit extended by a lender under a plan in which (a) the lender reasonably contemplates repeated transactions; (b) the lender may impose a finance charge from time to time on an outstanding unpaid balance; and (c) the amount of credit that may be extended to the consumer during the term of the plan (up to any limit set by the lender) is generally made available to the extent that any outstanding balance is repaid.

Regulation Z applies to: (regulation Z is designed to protect consumers against misleading lending practices).

Regulation Z applies to all persons (including branches of foreign banks and sellers located in the United States) that extend consumer credit to residents (including resident aliens).

Regulation Z

Regulation Z is part of the Truth in Lending Act of 1968. The legislation is designed to protect consumers against misleading lending practices.

Restrictions on Higher-Priced Mortgage Loans (resumed)

Repayment Ability Prepayment Penalties. Escrow Accounts for Property Taxes and Insurance

Residential mortgage transaction (Transaction hipotecaria residential)

Residential mortgage transaction means a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, (contrato de venta a plazos) or equivalent consensual security interes (garantia real consentida) is created or retained in the consumer's principal dwelling to finance the acquisition or initial construction of that dwelling.

Regulation Z Subpart E

Rules and exemptions for some mortgage transactions. -restrictions for high-cost mortgages, higher-priced mortgage loans, and home equity plans. -requirements for reverse mortgage transactions. -prohibitions on extension of credit secured by a dwelling. -It contains rules on valuation independence, -loan originator compensation for loans secured by a dwelling, loan --loan originator qualification standards, -counseling requirements and servicing requirements It establishes ---minimum standards for transactions secured by a dwelling, including repayment ability and qualified mortgage standards. -Additionally, it describes the TRID disclosure requirements for most closed-end transactions secured by real property.

Specific Definition. "business day"

Specific Definition. A business day means all calendar days except Sundays and the Federal legal public holidays.

Regulation "Z" Subpart B -

Subpart B—Covers open-end credit, including home equity loans and credit and charge accounts; sets forth (establece) rules for providing disclosures, resolving billing errors, calculating annual percentage rates and credit balances, and advertising; describes rules for credit card transactions and for home equity lines of credit.

Regulation "Z" Subpart C - Closed End Credit

Subpart C of Reg. Z relates to closed-end credit.

Web site of the Federal Financial Institutions Examination Council.

The average prime offer rate for both fixed and adjustable rate loans is published in a table and updated at least weekly, is shown in this web site

Transactions Exempt from Regulation Z. (regulation Z is designed to protect consumers against misleading lending practices).

business, commercial, or agricultural purpose, if credit is extended to other than a natural person (including credit to government agencies or instrumentalities

Finance Charges

The finance charge is the cost of consumer credit as a dollar amount. (Costo del credito del consumidor en dollars) It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit. In United States law, a finance charge is any fee representing the cost of credit, or the cost of borrowing. It is interest accrued (acomulado) on, and fees charged for, some forms of credit. It includes not only interest but other charges as well, such as financial transaction fees.

Notice to Assignee (High-Cost Mortgage)

The lender must give the following statement to the purchaser or assignee: "Notice: This is a mortgage subject to special rules under the Federal Truth in Lending Act. Purchasers or assignees of this mortgage could be liable for all claims and defenses with respect to the mortgage that the borrower could assert against the creditor."

Who is the the original lender is the lender?

The original lender is the lender named on the note.

Average Prime Offer Rate

The rate offered to the best-qualified borrowers as established by a survey of lenders. which is an annual percentage rate derived from average interest rates, points, and other loan pricing terms that is offered for mortgage transactions that have low-risk pricing characteristics.

Right of Rescission

The right of rescission is the right to cancel a contract. The lender must provide a written rescission disclosure to every borrower who is entitled to rescind. Remember, it only takes one borrower in a transaction to rescind the loan. A borrower may exercise his or her right to rescind by mailing or delivering a written notice to the lender. When the right of rescission applies, the borrower has a right to rescind the agreement until midnight of the 3rd business day

finance charge tolerances

Tolerances for the finance charge (toleracias por cargo de finaciamiento) in a closed-end transaction, other than a mortgage loan, are generally $5 if the amount financed is less than or equal to $1,000 and $10 if the amount financed exceeds $1,000. Under TILA and Reg. Z finance charge disclosures for open-end credit must be accurate, since there is no tolerance for finance charge errors.

TILA

Truth in Lending Act implemented by Reg Z. Requires to give disclosures about consumer's credit terms and costs in a common language before making a loan contract.

Canceling an Escrow Account (higher price mortgages)

Upon the earlier of two events:events The termination of the underlying (subjacent)loan After the 5-year period, the borrower may request that the escrow account be canceled. However, the loan's unpaid principal balance must be less than 80% of the original value of the property securing the underlying debt obligation, and borrower must be up to date in his payments

A presumption (supposition) of compliance is available for some transactions, but only if the creditor:

Verifies the consumer's repayment ability. • Determines the consumer's repayment ability using the largest payment of principal and interest scheduled in the first seven years following consummation considering current and mortgage related obligations. • Assesses the consumer's repayment ability taking into account either the ratio of total debts to income or the income the consumer will have after paying debt obligations. (Evalúa la capacidad de pago del consumidor teniendo en cuenta la relación entre las deudas totales y los ingresos o los ingresos que tendrá el consumidor después de pagar las obligaciones de la deuda.)

Other Transactions Exempt from Regulation Z. (regulation Z is designed to protect consumers against misleading lending practices).

_credit exceeds adjust threshold _not secured by real property or by personal property -used or will be use as the principal dwelling of the consumer. -Public utility credit. (creditor de servicios publicos) -Credits extended by Securities and Exchange Commission or the U.S. Commodity Futures Trading Commission, involving securities or commodities accounts. (cuentas de valores o materias primas). -Credit extended by a broker-dealer registered with the U.S. (Crédito otorgado por un corredor de bolsa registrado en la Comisión de Bolsa y Valores de U.S.) -Home fuel budget plans not subject to a finance charge. (Presupuesto usado como combustible para calentar tu casa) -Certain student loan programs -Certain employer sponsor retirement plans -Partial exemption for certain mortgage loans. (exención parcial para ciertos préstamos hipotecarios).

Annual Percentage Rate (APR)

is a measure of the cost of credit, expressed as a yearly rate that relates the amount and timing of value received by the consumer to the amount and timing of payments made. es una medida del costo del crédito, expresada como una tasa anual que relaciona la cantidad y el momento del valor recibido por el consumidor con la cantidad y el momento de los pagos realizados. APR is an Annualized representation of your interes rate. The APR must be determined under the actuarial method or the United States Rule method. APR is accurate in regular transactions, if is no more than 1/8 of 1 percentage point.

Regulation "Z" Subpart A - General Information

is information that applies to both open-end and closed-end credit transactions, including definitions explanations of covered and exempt transactions by the reg. Z and rules to determine which fees are finance charges.

Periodic Rate (Tasa periodica

means a rate of finance charge (tasa periodic de cargo fianaciero) that is or may be imposed by a lender on a balance for a day, week, month, or other subdivision of a year. The periodic rate may be stated as a percentage (for example, 1 and 1/2 % per month) or as a decimal equivalent (for example, .015 monthly). Periodic rate does not include initial one-time transaction charges,

Consumer Credit

means credit offered or extended to a consumer primarily for personal, family, or household purposes.

TILA - Application definition

means the submission of a consumer's financial information for the purposes of obtaining an extension of credit.

Prepayment Penalty

more than 36 months more than 2% of the amount prepaid.

prepayment penalty

penalty is a penalty for paying all or part of the principal before the date on which the principal is due.

Who implements TILA?

the CFPB's Regulation Z, 12 CFR Part 1026

Accurate APR

the annual percentage rate shall be considered accurate if the interes is no more than 1⁄8 of 1 percentage point above or below the annual percentage rate determined in accordance with either the actuarial method or the United States Rule method. The rate will be accurate if it is able to 'amortize' the amount financed.