Mortgage Lending Laws

Question 1

Truth-in-Lending and Regulation Z

Answer 1

• Lender has to tell you APR and other charges before closing
• Borrower has limited right of rescission, but excludes primary residence
• Lender has to follow advertising rules about full disclosure of costs and loan mechanics

Question 2

Equal Credit Opportunity Act (ECOA)

Answer 2

Prohibits discrimination in lending based on

• Race or color
• Religion
• National origin
• Sex
• Marital status
• Age
• Dependency upon public assistance

Denied applicants must get notice within 30 days

Question 3

Real Estate Settlement Procedures Act (RESPA)

Answer 3

Standardizes settlement practices & ensures buyers understand settlement costs

Lender must present:

• booklet explaining loans, settlement costs and procedures
• Provide estimate of settlement costs within three days of application
• Provide closing disclosure three days before loan consummation