What is the primary purpose of the Truth in Lending Act (TILA)?
TILA requires lenders to provide borrowers with clear information about the terms and costs of credit.
Which federal law helps prevent discriminatory lending practices?
The Equal Credit Opportunity Act (ECOA) prohibits credit discrimination based on race, religion, national origin, sex, and other factors.
What is the role of the Dodd-Frank Act in lending regulation?
The Dodd-Frank Act introduced stricter regulations on financial institutions to promote transparency and protect consumers.
Why is the Real Estate Settlement Procedures Act (RESPA) important?
RESPA ensures that borrowers receive disclosures about the real costs of closing and prevents kickbacks in settlement services.
Which document outlines the APR, loan amount, and payment schedule?
The Loan Estimate form provides key information to help consumers understand the terms of their mortgage.
What is the primary function of the CFPB?
The CFPB is responsible for enforcing consumer financial laws and ensuring that consumers are treated fairly.
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What is considered a 'trigger term' in mortgage advertising?
Trigger terms require clear disclosure of credit terms under TILA to avoid misleading advertisements.
Why must lenders verify a borrower's ability to repay?
This requirement prevents predatory lending and protects both borrowers and financial institutions from defaults.
Which disclosure helps borrowers avoid surprises at closing?
The Closing Disclosure provides a detailed account of the final loan terms and closing costs.