TILA AKA Regulation Z (SAFE EXAM)

What does TILA stand for?

Truth in Lending Act

What does TILA deal with

Deals with Credit, APR, and Advertising of consumer loans

TILA requires lenders to disclose…

the complete cost of credit to consumer loan applicants

TILA established a…

3-day right of rescission in certain transactions (HELOC/REFI’s)

What does HELOC stand for

Home Equity Line of Credit. A HELOC is a type of loan that allows homeowners to borrow against the equity in their home.

REFI

Stand for refinancing… is the process of replacing an existing loan with a new one, usually to achieve better terms such as a lower interest rate, reduced monthly payments, or a different loan term

If a borrower rescinds how long does escrow have to return any money?

20 days

Consumer may rescind the credit transaction until…

midnight of the third business day, Saturdays are included, Sundays are not

What type of transaction does TILA apply to?

Transactions that are payable by written agreement with more than 4 installments

What is the only fee that may be collected prior to disclosure

Fees for credit reports

How long must General TILA disclosures be kept for?

2 years

How long must the loan estimate be kept for?

3 years

How long must the closing disclosure be kept for?

5 years

What do the TILA Disclosures include?

Loan Estimate and Closing Disclosure

RESPA states a consumer must get the loan estimate…

At or within 3 days of the application

RESPA states a consumer must get the closing disclosures…

3 days prior to doc signing or at doc signing

TILA Disclosures include a CHARM booklet, what does CHARM stand for?

Consumer Handbook on Adjustable Rate Mortgages

When would the consumer get the CHARM booklet

When they are getting an adjustable rate mortgage

TILA disclosures include the When Your Home is on the Line Disclosure when…

The consumer is getting a HELOC or a REFI

APR

Annual Percentage Rate, also know as Effective Rate

Interest Rate

Can be called as Note Rate or Nominal Rate

Penalty for single violation of TILA

$5000 per day

Penalty for reckless violation of TILA

$25,000

Penalty for knowingly violating TILA

$1,000,000