A lender's website advertisement states 'ARM loans with initial rates as low as 2.75% APR, adjusting annually after the first year.' What additional disclosure is required under TILA advertising rules?
Correct Answer
B) A statement that the rate may increase and the maximum rate
Under TILA Regulation Z Section 1026.24(g), advertisements for variable rate transactions must include a statement that the rate may increase and the maximum rate. While the ad mentions the rate adjusts annually, it must specifically state that the rate may increase and disclose the maximum possible rate.
Why This Is the Correct Answer
Under TILA Regulation Z Section 1026.24(g), advertisements for variable rate transactions must include a statement that the rate may increase and the maximum rate. While the ad mentions the rate adjusts annually, it must specifically state that the rate may increase and disclose the maximum possible rate.
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?
Which information is NOT required to be included in an AfBA disclosure?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
For a purchase money mortgage with a loan amount of $400,000, which of the following represents the correct method for calculating the APR?
Which of the following fees would NOT be included in the finance charge calculation under TILA?
A servicer receives a borrower's written request for payoff information on Monday. The borrower needs the information for a refinance closing scheduled for the following Friday. When must the servicer provide an accurate payoff statement?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
A borrower refinances their primary residence on Tuesday and receives the required TILA disclosures. Assuming no federal holidays, what is the last day they can exercise their right of rescission?
A borrower's mortgage payment includes principal, interest, taxes, insurance, and a monthly HOA fee collected by the lender. Which components are included in the finance charge calculation?
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