Truth in Lending Act (TILA)

Question 1

Act: Truth in Lending Act (TILA) – Title 1 of Consumer Credit Protection Act (CCPA)
Reg:
Oversee:
Enforced:

Answer 1

Reg: Z
Oversee: CFPB
Enforced: CFPB

Question 2

TILA Enables….

Answer 2

Customer to compare cash vs cost of credit

Question 3

TILA Covers:

Answer 3

APR

Question 4

TILA APR:

Answer 4

• Includes all lender costs of credit (interest rate, all lender fees, discount points, mortgage insurance costs, tax life of certification)
• Excludes non-lender costs( appraisal, attorney, title insurance, settlement costs, HOA dues, homeowners insurance, taxes, inspections, seller paid buyer closing costs)

Question 5

Final APR for a “Regular Transaction”:

Answer 5

Must be within 1/8 of a percent (0.125%) of final settlement statement.

Question 6

Final APR for a “Irregular Transaction”:

Answer 6

Must be within 1/4 of a percent (0.250%) of final set tlement statement

Question 7

TILA BUSINESS DAYS:

Answer 7

• General Business Days

- Rescission Business Days

Question 8

TILA Business Days:

Answer 8

Days on which the creditor’s office s are open to the public for carrying
on ‘substantially all’ of its business functions.

Question 9

TILA Rescission Business Days:

Answer 9

All calendar days except Sunday and legal holidays. Both definitions are relevant to the required disclosures under the Regulation Z.

Question 10

TILA Disclosures are submitted within:

Answer 10

3 General Business days of Application received

Question 11

TILA Disclosures:

Answer 11

• Material disclosures
• Consumer Handbook on Adjustable Rate Mortgages (CHARM)
• ARM Product Disclosure

Question 12

Truth in Lending (TIL)- “material disclosures”- FAT PA is:

Answer 12

• Finance charge
• Amount financed
• Totalof payments
• Payment Schedule
• APR

Question 13

ARM Product Disclosure is:

Answer 13

give one notice for each product they show interest (interest can change, which index is being used, how to add with margin, and frequency of changes, a historical index on arm/maximum payment they can have, & notice that they aren’t required to complete loan just because they received disclosure). ARMS must have rate caps.

Question 14

The Truth in Lending (TIL)- “material disclosures are subject to the following timing rules:

Answer 14

3-7-3 Rule

Question 15

3-7-3 Rule is:

Answer 15

• 3- disclose within 3 RESPA General Business Days of application
• 7- can’t close until 7 TILA Rescission Business Days after disclosure
• 3- each new TIL disclosure starts a new 3 TILA Rescission Business Day waiting period over before you can close (must keep TIL within 0.125%)

Question 16

TILA Right Of Rescission is:

Answer 16

For refinance on principal dwelling only- must give to all owners of property being used as collateral. Any owner can rescind within 3 Rescission Business Days of closing, so can’t fund loan till 3 Rescission Business Days after closing after midnight.

Question 17

TILA Advertising:

Answer 17

Triggering Terms

Question 18

TILA Triggering Terms:

Answer 18

In advertisement if # for amount of down payment, payment amount, number of payments, or finance charge, you must disclose amount/% of down payment, terms of repayment, APR and if APR can increase

Question 19

TILA Appraisals:

Answer 19

Appraisal Independence

Question 20

TILA Appraisal Independence:

Answer 20

Appraisal now done though Appraisal Management Company and you can only ask that they consider something, explain something in further detail, or correct an error

Question 21

TILA Penalties:

Answer 21

Civil= actual damage + legal costs
Criminal = $5k/1year in jail (Same as TILA)
Advertising- $16k per day after cease and desist order and corrective advertising/disclosures