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What Truth In Lending Means To Homeowners

 

Truth In Lending Act (TILA)

The Truth in Lending Act (TILA) protects prospective U.S. homeowners from predatory lending in two important ways. It creates standard terminology and formats for comparing mortgage loan terms. It also requires full disclosure of all costs associated with a loan. If you’re concerned about home foreclosure and waiting for new federal assistance to take effect, look into a tried and true law that has been helping Americans with home mortgage payments for years. The applicable section, Regulation Z, seeks to intervene in large credit transactions in which the consumer may be damaged, before distress sets in.

This 1968 legislation covers credit card account holders in a similar manner, so TILA may impact you and your family on many levels. Homeowners facing bank foreclosure, however, have the most to gain from this law’s enforcement—and sometimes from its violations. If your loan’s legal terminology or lack thereof does not satisfy TILA requirements, you may be able to stop foreclosure and sue for damages. An experienced real estate attorney can look into possible written infractions in your loan documents.

More than just a disclosure act, TILA carries rights for mortgagees, including:
  • A three-day waiting period before the loan can be finalized
  • The right to rescind the loan
  • The right to recovery for violations in court
The sum of the legislation gives consumers the further right to compare credit offers in a straightforward manner, with standards that make the comparison easy for prospective home buyers to understand.

Real estate law is complicated and can vary from state to state so it is important to speak with an attorney who specializes in real estate law before making any hasty decisions. Whocanisue.com can help you find an experienced foreclosure attorney in your area.

Truth in Lending Requirements for Lenders

The details that must be disclosed prior to an acceptance of credit ensures that all lenders meet a certain threshold of fairness. The loan amount, repayment term, and all associated costs must be made available to consumers in both print literature and any oral communication on the subject, such as advertising. This lets buyers know what their total financial obligations will be.

Mortgages with fixed and adjustable rates must offer basic information:
  • Annual percentage rates (APRs)
  • Applicable finance charges
  • Net amount financed
  • Payment grand total
Adjustable rate mortgage offers must also provide an approved handbook that describes how these loans work, as well as periodic announcements of any interest rate adjustments.

Any omissions in these areas can mean that your loan is invalid and can be contested with the help of a foreclosure attorney in court.

Any figures that do not reconcile with the language in your loan can also be disputed, possibly staving off a foreclosure situation and even winning you money by court award. That is why it is a good idea to review your loan policy with a qualified legal representative annually. If you are feeling the crunch now, though, it may pay to consult your lawyer immediately. Time is of the essence in property and credit transactions.

Standardized Reporting Helps Homeowners Save Money

How information about a credit offer must be disclosed levels the playing field for consumers. A standard format for the required disclosures allows buyers to compare loans on a relative scale and to choose the one that they find most beneficial. This type of shopping lets buyers who may be making the biggest purchase of their lives make a truly informed decision.

If you are seeking a loan adjustment or refinance, this TILA requirement will help you weigh the benefits of your options. The lender will supply a federally regulated statement with the APR, costs above the principal amount, repayment term and total due. If you are considering adjustable rate loans, these figures must be provided for all comparable loans.

Since real estate law is complicated and can vary from state to state, it is important to speak with an attorney who specializes in real estate law before making any hasty decisions. Whether you are a homeowner, landlord, or tenant, Complete our short questionnaire to find an experienced foreclosure attorney in your area.
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