What does TILA require? |
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| TILA requires that: • Adjustable Rate Mortgage (ARM) Rate Calculations must be correct • ARM Adjustment Disclosures must be correct • Annual Percentage Rate (APR) must be adequately calculated and disclosed according to the finance charges calculations When interest rates change, especially when they rise, ARM adjustments become much more complicated and Indexes play into the picture. These economic forces can cause disaster on improper disclosures. ARM program disclosures must be provided as soon as a customer asks about an ARM program. We review the loan application to determine if the loan program applied for is different than the one you were eventually approved for. Sometimes the initial loan application is for a fixed rate loan, whereas the borrower is forced to accept an adjustable rate mortgage at the closing table. We review the stated income and assets to see if they were inflated by the loan officer. We analyze the total fees charged by the broker and lender to determine if you were overcharged. |
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What is TILA? |
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| The Truth in Lending Act, 15 U.S.C. §§1601 et seq. (“TILA”), as amended by the Home Ownership and Equity Protection Act of 1994 ("HOEPA"), Pub. L. 103-325, 108 Stat. 2190, adding 15 U.S.C. §§1602(aa) and 1639, and implementing FRB Regulation Z; 12 C.F.R. part 226.
There is also an Official FRB Commentary, 12 C.F.R. part 226 Supp. I, which despite its name is a regulation issued under the Administrative Procedure Act, 5 U.S.C. §553, and entitled to be treated as such. The portions of Regulation Z and the Commentary implementing HOEPA were substantially revised in December 2001. 66 FR 65604 (Dec. 20, 2001). |
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Truth in Lending Act (TILA)
Part 3 of 6