Affinity 800 Facts TILA Worksheet 1-40 Flashcards
What does TILA stand for & which 2 agencies passed it?
Truth in Lending Act
Passed by Consumer Credit Protection Act (CCPA) & implemented by Federal Reserve Board
Who administers TILA & what Regulation is TILA?
CFPB administers TILA (Consumer Financial Protection Bureau) & TILA is Regulation Z
What is the main purpose of TILA & what is it’s acronym?
TILA was put in place to protect consumers during credit transactions (be truthful & not misleading when it comes to advertising about credit) & deals with (CARFAC):
Credit
APR – for the sake of uniformity use APR to define finance charges
Right of Rescission
Finance charges Disclosure (similar to APR)
Advertising
CHARM booklet
When does TILA apply?
TILA is for residential & personal use mortgages (1-4 units), credit transactions of more than 4 installments
When does TILA not apply?
TILA doesn’t apply to commercial & other non-residential mortgages
How many installments are required for TILA to kick in?
More than 4 installments
What are the TILA disclosures & what is the acronym
TILA disclosures – CRAWL CTB (CRAWL CuTe BABY):
Closing Disclosure
Right to Rescind Disclosure
ARM Disclosures
When your Home is on the Line – HELOC or Home Loan or REFI
Loan Estimate
CHARM Booklet – when homeowner receives an Adjustable Rate Mortgage (ARM)
Transfer of Ownership Disclosure
Balloon Payment Disclosures
What is the Transfer of Ownership Disclosure & when does it apply?
Transfer of Ownership Disclosure – only applies to primary mortgage – when there is a new owner of a mortgage (lender to lender) – must notify borrower within 30 days of acquisition
How does the Transfer of Ownership Disclosure differ from the Transfer of Servicing Disclosure?
Transfer of Ownership discloses a new lender while Transfer of Servicing shows new servicer
How far in advance must a loan servicer notify consumer about rate change with ARM?
Sent 60 days notice before the rate changes but no earlier than 120 days (affects their payments)
What is the purpose of a Loan Estimate (LE), how many pages is it & when does borrower get it?
Loan Estimate/LE is 3-page potential/estimate of closing costs will be for the consumer that they get at or 3 business days after receiving a completed application
What is on a LE
LE disclosure includes (what you should be getting & how much $ you need to close):
APR (initial)
Estimated Cash to Close the transaction
Other loan features/terms
Settlement service provider costs
What is a Closing Disclosure, how many pages is it?
Closing Disclosure/CD is a 5-page disclosure that is provided to borrower 3 business days before closing & a final CD at closing/doc signing – provides borrower with actual closing costs
What is on a CD
Closing Disclosure includes:
Final terms of the mortgage loan
Loan costs
Various loan disclosures
What is the APR?
Annual Percentage Rate/APR % version of the $ finance charge, not just the interest rate – it’s the IR
+ finance charges spread out over the loan
What is higher the APR or the Interest Rate (IR)?
APR is higher than the interest rate