Truth-in-Lending
What transactions are not covered by Truth in Lending Act?
>Any "all cash" transactions >Commercial and Agriculture loans >Seller Financing (contract for deed or purchase money mortgage) >Construction loans for a commercial building >Loans secured by a residential rental property >Consumer loans with 4 or fewer installments (think online shopping installment payment options)
What does truth in lending act cover?
>Credit card accounts >Long-term installment contracts 5 or more >Residential home loans >Refinancing existing loans >Home equity loans >Second mortgage on a home >Loans secured by a residence even if they are used for business purposes > Personal Loan for home improvements
What isn't included in APR?
Any regular costs not associated with financing like. The things you would have to pay even if you payed cash like: principal on the loan, deed preparation fees, closing or settlement charges, prepaid taxes, title insurance)
Where can you find the do not call list and how are they sorted?
Register with the FTC's website. The list is sorted by area code. You get 5 free area codes.
What is another name for Truth-in-Lending?
Regulation Z
Who enforces the do not call list?
The Federal Communications Commission (FCC) and the Federal Trade Commission (FTC)
What is the purpose of Truth-in-Lending?
Designed to help consumers determine and compare the true cost of credit and to shop for the best credit terms. It prohibits misleading advertising of financial terms.
What does the Truth in Lending Disclosure Statement need to include, what would it not include?
Would: > Cash price > Amount of down payment > Number of payments > Amount of each payment > Prepayment penalties (if any) > Late payment penalties > Total of all payments > Annual Percentage Rate (APR) > Date finance charges begin Would NOT: >accrued interest
Is it illegal to solicit someone who is registered on the national do not call registry?
YES, unless there is already an existing business relationship within the last 18 months, the registrant had made a inquiry with the company within last three months, or you are conducting a telephone research survey.
What does the Truth in Lending Act require?
It requires that borrowers receive a disclosure statement of the annual percentage rate and true cost of consumer financing.
Can lenders charge a fee for preparing the disclosure statement?
NO
What does the Truth in Lending Act not regulate?
The amount of interest a lender may charge The length of time a contract may run Does not eliminate discrimination in lending
What is APR?
The true cost of credit, it includes the interest rate and the cost of all finance charges. The things you have to pay bc you borrowed money like: loan discount points, origination fees, mortgage insurance, service charges, prepayment charges, etc.
T/F Do you need consent to send a fax ad? What is the provision that must be included?
True, and there must be an "opt-out" provision included.
T/F: Any ad containing general, nonspecific statements does not need to provide full disclosure.
True, there won't be any trigger terms in these adds, even if they use numbers don't be fooled. E.g. Walk away with this home for only $85,000 (THIS IS NOT A TRIGGER TERM)
T/F: Any ad which refers to financing details, typically using trigger terms, must provide full disclosure.
True, trigger terms are easily spotted because they are all numbers. E.g. $4,000 down, 8% financing, only 8 years to pay.
How many days do consumer borrowers have to rescind their loan agreements under the Truth in Lending Act ?
Up to 3 business days after the loans is made or the finance charges are disclosed or the notice of the right of rescission is delivered (whichever is later).