Under TILA regulations, what disclosure requirement applies specifically to balloon payment mortgages?
Correct Answer
B) The borrower must receive written notice that the loan contains a balloon payment
Under TILA (Truth in Lending Act), lenders must clearly disclose when a mortgage contains a balloon payment. This disclosure must be provided in writing and must clearly explain that a large final payment will be due. This helps ensure borrowers understand the loan structure and potential refinancing needs.
Why This Is the Correct Answer
Under TILA (Truth in Lending Act), lenders must clearly disclose when a mortgage contains a balloon payment. This disclosure must be provided in writing and must clearly explain that a large final payment will be due. This helps ensure borrowers understand the loan structure and potential refinancing needs.
More Mortgage Knowledge Questions
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A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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