Under TILA, what is the primary purpose of requiring APR disclosure in mortgage lending?
Correct Answer
B) To provide a standardized way for borrowers to compare credit costs
Under TILA/Regulation Z, the primary purpose of APR disclosure is to provide borrowers with a standardized measure that reflects the true cost of credit, including interest and certain fees, expressed as a yearly rate. This allows borrowers to compare different loan offers on an 'apples-to-apples' basis.
Why This Is the Correct Answer
Under TILA/Regulation Z, the primary purpose of APR disclosure is to provide borrowers with a standardized measure that reflects the true cost of credit, including interest and certain fees, expressed as a yearly rate. This allows borrowers to compare different loan offers on an 'apples-to-apples' basis.
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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A mortgage lender reviews HMDA data and discovers that 85% of African American applicants were denied loans compared to 25% of white applicants with similar credit profiles. This pattern most likely indicates:
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For a purchase money mortgage with a loan amount of $400,000, which of the following represents the correct method for calculating the APR?