An advertisement states 'Jumbo loans available with interest rates starting at 4.125%.' To be TILA-compliant, what must this rate represent?
Correct Answer
B) The annual percentage rate (APR)
Under TILA Regulation Z Section 1026.24(f), any rate stated in an advertisement must be stated as an annual percentage rate using that term. The rate cannot be a simple interest rate or any other rate measurement - it must specifically be the APR that includes the cost of credit.
Why This Is the Correct Answer
Under TILA Regulation Z Section 1026.24(f), any rate stated in an advertisement must be stated as an annual percentage rate using that term. The rate cannot be a simple interest rate or any other rate measurement - it must specifically be the APR that includes the cost of credit.
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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Under HOEPA, a first-lien mortgage is considered a high-cost mortgage if the APR exceeds the average prime offer rate (APOR) by more than:
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