Pratice Chapter 12 - Legislation Affecting Financing

Question 1

Truth-in-Lending Act (TILA)

Answer 1

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.

Question 2

Redlining

Answer 2

An illegal lending policy of denying real estate loans on properties in older, changing urban areas, usually with large minority populations, because of alleged higher lending risks without due consideration being given by the lending institution to the credit worthiness of the individual loan applicant.

Question 3

Real Estate Settlement Procedures Act (RESPA)

Answer 3

A federal law requiring the disclosure to borrowers of settlement (closing) procedures and costs by means of a pamphlet and forms prescribed by the United States Department of Housing and Urban Development.