Regulation Z (Truth-in-Lending)
Regulation Z created to enforce the Truth in Lending Act (TILA) requires that credit institutions inform borrowers of the true cost of obtaining credit
Generally applies when a credit transaction is secured by a residence.
The regulation does not apply to business or commercial loans or to agricultural loans of any amount.
Real Estate Settlement Procedures Act (RESPA)
The Real Estate Settlement Procedures Act functions to ensure buyers and sellers are fully informed of all closing costs related to closing the transaction following a real estate sale.
This Act does NOT apply to:
A second mortgage on a single family dwelling
A construction loan on a commercial building
A new loan to purchase a 30-acre farm
The Act DOES apply to a first mortgage loan to purchase a family residential dwelling.
Under this Act
the lender is required to use a particular closing statement form, Closing Disclosure Form (developed bu the Consumer Financial Protection Bureau) within 3 business days after a loan application is submitted to the lender.
"Kickback" are prohibited (A kickback is when a fee paid by a surveyor to a broker for referrign property to be surveryed)
Lenders must keep no more than approximately 2 months of escrow payments as a cushion
Lenders must provide borrowers with a loan estimate form
A special information booklet with information about settlement costs be given to applicants
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