A lender provides a borrower with initial TILA disclosures showing an APR of 4.5%. Due to market changes, the final APR at closing is 4.625%. What disclosure requirement applies?
Correct Answer
A) No additional disclosures required since the change is within tolerance
Under TILA Section 1026.19(f), the APR tolerance for most closed-end mortgages is 0.125%. Since the increase from 4.5% to 4.625% equals exactly 0.125%, it is within tolerance and no additional disclosures are required.
Why This Is the Correct Answer
Under TILA Section 1026.19(f), the APR tolerance for most closed-end mortgages is 0.125%. Since the increase from 4.5% to 4.625% equals exactly 0.125%, it is within tolerance and no additional disclosures are required.
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?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam