(TILA) Truth in Lending Act: Ch 40
When must the written APR disclosure be delivered to the borrowers?
3 business days following receipt of loan application.
72-Hour Right of Rescission
As a remedy for fraud, or by agreement of the parties, all parties return to their original position prior to the executing of the contract. It is also known as a "contract to end a contract." Gives the borrowers a three-day (72-hour) right to rescind their agreement to borrow following delivery of the "Notice of Right to Cancel" (rescind).
According to Truth in Lending, what is NOT correct regarding the right of rescission?
It includes not only the loan, but also the purchase. (Correct: There is a 3 day or 72-hour right of rescission; all parties must acknowledge the right of rescission; if not apply correctly, the borrower has 3 years to rescind the loan.)
What required disclosure under the Truth in Lending Act, is intended to provide meaningful information regarding the cost of credit and terms of prospective loan?
Loan Estimate
When can a loan officer fill out, alter, to interpret a Real Estate Purchase Contract (REPC) for the borrowers?
Never
What las was enacted in 1968 as part of the Consumer Credit Protection Act?
TILA
Co-borrowers (Co-signers)
These persons are equally entitle to receive disclosures.
Federal Consumer Credit Protection Act
This act is also known as Truth In Lending Act. (TILA).
The fees used in calculating the APR include all of the following EXCEPT:
Title insurance premium. (Used: Interest charged, lender fees, mortgage insurance)
True or false: Discount points are included in the APR
True
True or false: Document Preparation fees are included in the ARP
True
True or false: If a trigger term is used then APR is a required disclosure
True
True or false: If a trigger term is used then loan amount is a required disclosure.
True
True or false: If a trigger term is used then the number of payments is a required disclosure.
True
True or false: Only one borrower must rescind to cancel a loan
True
True or false: The VA funding fee is included in the APR
True
A loan that stipulates a charge for early payoff, before a specified period of time, is likely to include a(n):
payment penalty
The following are NOT generally included in the APR:
-Fees paid to third party (title co., home inspection, tax services, appraisal, credit check, attorney fees, etc.) vendors. -Escrow company fees. -Title insurance premiums. -Reserves collected for taxes and insurance. -Property purchase costs (if purchasing something other than real estate).
The following fees are generally included in the APR calc:
-Interest. -Origination fee. -Discount Points. -Processing fee. -Underwriting fee. -Documentation preparation fee. -Private Mortgage insurance . -FHA Up Front Mortgage Insurance Premium (UFMIP). -VA funding fee. -Warehousing fees. -Loan application fee. -Credit life insurance on the mortgage.
Truth in Lending is administered by:
Consumer Financial Protection Bureau
True or false: Reserve account payments are included in the APR
False
True or false: The credit report fee is included in the APR
False
True or false: The home inspection fee is included in the APR
False
True or false: The tax service fee is included in the APR
False
True or false: Title insurance is included in the APR
False
True or false: If the APR changes by 0.0120 the TIL must be given again.
False If is changes by more than 1/8 of 1% point, it must be re-disclosed before closing.
The requirements of Truth In Lending include all of the following EXCEPT:
Good Faith Estimate (Required: Consumer Handbook on Adjustable Rate Mortgages, the right of rescission, fair advertising disclosures)
To identify and clarify disclosures regarding high interest rates, and/or high-fee loans, what Federal law was enacted?
Home Ownership and Equity Protection Act (HOEPA)
Annual Percentage Rate (APR)
The interest rate plus any other charges for the loan, including such things as discount points and origination fees; computed as a yearly percentage rate. It is used for comparing loans.
Trigger Term
Under Truth in Lending, if any number other than the APR or purchase price is used in advertising, all these other numbers must be disclosed.
Regulation Z
provision extending truth-in-lending disclosures to consumers in credit transactions.
