Under TILA's advertising requirements, if an advertisement states 'No closing costs,' what must be disclosed?
Correct Answer
C) How the closing costs are being paid or absorbed
Under TILA and fair advertising practices, if an advertisement claims 'no closing costs,' it must clearly disclose how these costs are being handled - whether they're rolled into the loan, paid by the lender, or result in a higher interest rate. The advertisement cannot be misleading about the true cost of the loan.
Why This Is the Correct Answer
Under TILA and fair advertising practices, if an advertisement claims 'no closing costs,' it must clearly disclose how these costs are being handled - whether they're rolled into the loan, paid by the lender, or result in a higher interest rate. The advertisement cannot be misleading about the true cost of the loan.
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Which of the following advertising practices is specifically prohibited under federal mortgage regulations?