A lender discovers an error in the APR disclosed on a closed-end mortgage loan after consummation. The disclosed APR was 4.25% but should have been 4.75%. Which action is required under TILA?
Correct Answer
C) Provide corrected disclosures within 60 days and offer to recompute the loan
Under TILA Section 1026.23, when an APR error exceeds the tolerance threshold (0.125% for most loans), the creditor must provide corrected disclosures within 60 days of discovery and offer to recompute the transaction.
Why This Is the Correct Answer
Under TILA Section 1026.23, when an APR error exceeds the tolerance threshold (0.125% for most loans), the creditor must provide corrected disclosures within 60 days of discovery and offer to recompute the transaction.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
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