© oncourse learning chapter 12 : the loan and the consumer
TRANSCRIPT
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Chapter 12: The Loan and the Consumer
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A federal law that requires certain disclosures when extending or advertising credit.
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TRUTH-IN-LENDING ACT
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Federal regulations that implement the enforcement of the Truth-in-Lending Act.
REGULATION Z
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Truth-in-Lending ActRequires lender to show the borrower the
cost of the credit.Requirements include:
Amount financed Finance charge Annual percentage rate Total payments
REGULATION Z
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Annual percentage rate combines the interest rate with the other costs of the loan into a single figure that shows the true annual cost of the loan.
APR
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Borrower’s right to cancel a credit transaction.
Three business days after signing to back out.
Includes Saturdays.Does not apply to credit used for the
acquisition or initial construction of your principal dwelling.
RIGHT TO RESCISSION
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• Down payment• Any payment• Number of payments• Period of payments• Amount of any finance charge,
or statement: no charge for credit
• Cash price or the amount of the loan
• Down payment (or none)• Number, amount,
frequency of payments• Annual percentage rate (APR)
• Deferred payment price or total payments
Mention these Triggers disclosure
Triggering Items and Disclosures
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• Borrower• Property• Title
Lenders Qualify:
Loan Process
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Refusing to make loans in certain areas.
REDLININ
G
NoLoans!
$ $$
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Provides lender with independent means of checking borrower’s credit history.
Fair Credit Reporting Act – consumer right to their fi le at credit bureau.
Credit Scoring – method used today to evaluate credit risk.
CREDIT REPORT
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The FlipThe Old SwitchThe Contractor’s SchemeThe Ultimate LieThe Innocent InvestorTrust Me Identify ThiefFake Check/Fast Closing
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PREDATORY LENDING AND MORTGAGE FRAUD
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APRCredit reportFair Credit
Reporting ActFinance charge
Liquid assetRedliningRegulation ZTruth-in-Lending
Act
KEY TERMS
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