CHAPTER FOUR: TRUTH IN LENDING TIL

Question 1

___ in ___ act- The name given to the federal statutes and regulations
(Regulation Z) which are designed primarily to ensure that prospective borrowers and
purchasers of credit receive credit cost information before entering into a transaction. to protect
consumers. Specifically, TILA was designed to make sure consumers are provided with various
types of disclosures by creditors when the consumer is looking to take on debt.

Answer 1

Truth-in-Lending Act (TILA)

Question 2

There are three main requirements for lenders under TILA which are

1. 2.
   3.

Answer 2

the disclosure requirements

the three-day right of rescission

the advertising guidelines

Question 3

When you think about ____ , it is important to remember the law is in place to ensure the correct
disclosures are given to the borrow so that they can make an informed decision. Put simply, the
law requires certain disclosures be made to the borrowers so that they understand the actual cost
of borrowing the money, and have the opportunity to compare offers with other lenders

Answer 3

TILA

Question 4

TILA does ___ regulate the actual cost of borrowing, it just dictates the information that must
be disclosed to the client about the cost of borrowing.

Answer 4

not

Question 5

There are five different types of loans that are covered by TILA, and they are:

1.
2.
3.
4.
5. 

Commercial transactions are not covered by TILA.

Answer 5

- residential,
• federally related,
• 1 to 4 family properties,
• non-commercial properties, and
• family farms

Question 6

The new rules include the
TILA-RESPA Integrated Disclosure Rule

1. which is called the Loan Estimate must me made three days after the purchaser
   submits specific information to the lender. Once the following information is provided to the lender
   the first disclosure must be made:
   Name, Income, Social Security number, the address of the home they hope to purchase, an estimate
   of the home’s value (typically the sale price) and the amount they want to borrow.
2. that needs to be made is the closing disclosure which is often referred to as
   the CD. This is the disclosure that as a real estate agent you need to be most familiar with, to avoid
   closing delays.

Answer 6

The first disclosure

the second disclosure

Question 7

under TILA, you
are guaranteed the right to change your mind within three business days. There are certain events
that must take place to start the three day period, and they are as follows:

It is imperative that real estate agents remember that when it comes to all
things TILA, business days include Saturday even if the lender is closed!

Answer 7

• The credit contract has been signed
• The borrower has received a closing disclosure
• The borrower has received two notices explaining the right to rescind.

Question 8

If a lender fails to deliver the proper disclosures they can be held liable as follows:

Answer 8

• Actual damages the borrower incurs as a result of the failure to disclose.
• Statutory Damages as defined by law which typically range from $400-$4,000.

Question 9

Under TILA, the settlement agent must provide the lender with certain financial information with
__ to __ days of closing

Answer 9

10 to 14