Truth in Lending Act - TILA, Reg Z

Question 1

What is the TILA?

Answer 1

To assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily teh various credit terms avilable to him and avoid the uniformed use of credit

Question 2

What is a business day?

Answer 2

Any day a company is open for business

Question 3

What is a dwelling?

Answer 3

A residential structure which contains between one and four units and does not need to be attached to real property (includes condos and co-ops)

Question 4

What is a finance charge?

Answer 4

The cost of obtaining credit paid by the consumer

Question 5

What are prepaid finance charges?

Answer 5

Charges which are paid separately before or at the time of consummation or which are withheld from the proceeds of the loan

Question 6

Must an advertisement that contains an interest rate also include the APR?

Answer 6

Yes, and no other disclosures are required if only the interest rate is in it

Question 7

What are the advertising trigger terms?

Answer 7

1. Amount or percentage of any down payment
2. Number of payments or period of repayment
3. The amount of any payment
4. The amount of any finance charge

Question 8

What are advertising required disclosures?

Answer 8

1. The amount or percentage of the down payment
2. The terms of repayment
3. The APR

Question 9

What are some fees that ARE NOT included in the prepaid finance charges used in APR calcs

Answer 9

1. Title insurance
2. Escrow for taxes and insurance
3. Notary fees
4. Appraisal fees
5. Termite inspection fees
6. Credit report charges

Question 10

What must happen if any terms of the required disclosures change during the transaction outside the tolerance level?

Answer 10

It must be re-disclosed according to TILA-RESPA requirements

Question 11

What are the APR and Finance Charge tolerance amounts?

Answer 11

APR: 1/8%

Finance charge: $100

Question 12

What loans qualify as “High Cost/HOEPA?”

Answer 12

1. Loans with an APR which exceeds comparable treasury yields by more than 6.5% for first lien; 8.5% for subordinate liens
2. Loans with fees payable which will exceed 8% of the total loan amount or $400, whichever is greater

Question 13

What is right of recission?

Answer 13

The right borrowers have to rescind a transaction in which a security interest is given in their primary residence until midnight on the 3rd biz day following consummation of the transaction or delivery

Question 14

Does right of recission apply to purhcase transactions?

Answer 14

No

Question 15

When does the 3 day period within right or rescission start?

Answer 15

Once the final owner has received the disclosures