An online mortgage advertisement displays 'Refinance today! 3.5% rate available.' Under TILA, what makes this advertisement potentially non-compliant?
Correct Answer
C) The rate appears to be the APR but doesn't include the phrase 'annual percentage rate'
Under TILA Regulation Z Section 1026.24(f), if an advertisement states a rate of finance charge, it must state the rate as an 'annual percentage rate' using that term or the abbreviation 'APR.' Simply stating '3.5% rate' without clarification violates this requirement.
Why This Is the Correct Answer
Under TILA Regulation Z Section 1026.24(f), if an advertisement states a rate of finance charge, it must state the rate as an 'annual percentage rate' using that term or the abbreviation 'APR.' Simply stating '3.5% rate' without clarification violates this requirement.
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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