federal laws 2.txt

• 1. promote the informed use of credit by clearly disclosing terms & costs of credit
• 2. help consumers better compare the terms of loans offered by various creditors through early disclosures
• 3. provide consumers with the right to cancel (rescind) certain loans that involve liens on primary dwellings.

1)rules not cover loans to buy or build a home, reverse mortgages or revolving home equity lines of credit

The homeownership and Equity Protection Act (HOEPA)

When the total points and fees payable by the consumer at or before closing, exceed larger of $579 or 8% of the total loan amount.

• 1. A written notice stating that the loan need not be completed (3 busn days cooling period to decide whether to sign the Section 32 disclosure)
• 2. The notice must warn the borrower the creditor will have a mortgage on the home
• 3. lender must disclosure the APR

• 1. All ballon payment
• 2. negative amortization
• 3. default interest rate higher than pre-default rates
• 4. most prepayment penalties
• 5. a due on demand clause
• 6. refinance into another HOEPA loan within 12 months unless new loan is in the best interest of borrower
• 7. open-end loan (home equity line of credit)

Any mortgage (purchased or non-purchase money) secured by a consumer's principal dwelling with an APR exceeding the "Average Prime Offer Rate" (APOR), on prime loans by at lest 1.5% points on 1st lien loans & 3.5% points on subordinate-lien loans.

• 1. engaging in a pattern & practice of relying on the collateral securing the loan without regard to the consumer's ability to repay the loan
• 2. relying on a consumer's income & assets without verifying such amounts through reasonable reliable third-party documents
• 3. imposing any pre-payment penalty if the consumer's payment can change in the 1st 4 years of the loan term.
• 4 originating 1st lien, higher priced loans, without establishing an escrow acount for property taxes & homeowners insurance.

Federal Reserve Board

VA or FHA loans

• 1. automatic termination: once 78% of original value of property is reach; borrower must be current in payment and lender must cancel coverage within 30 calendar days of automatic termination date
• 2. By Request: homeowner request cancellation of PMI once home reaches 80% ltv. lener is not required to honor request by law. will consider based upon pay history, timeline or subordinate financing.

• 1. at closing closing & 2. on an annual basis, servicer must disclose to the consumer their rights to request cancellation of PMI coverage
• 3. upon cancellation, service must notice consumer in writing that PMI has been terminated & no further premiums are due

• Agency: board of governors of the Federal Reserve System (FRB)
• Enforecement Agency: Federal Trade Commission (FTC)

• 1. creditors & mortgage brokers from, coercing, influencing, or encourgaging an appraiser to misrepresent the value of the property.
• 2. servicers from, failing to credit a payment to the consumer's account as of date of its receipt; or failing to provide a payoff statement within a reasonable amount of time after a request. Frobids the "pyramiding" of late fees.

• prohibit against misleading & deceptive advertising practices.
• 1. representing that an interest rate or payment is fixed when in fact , it can change
• 2. advertisers provide accurate & balanced information in a "clear & conspicuous" manner, about rates, payments and other loan features
• 3. specific requirements that advertisements state all applicable rates or payments with equal prominence and in close proximity to any "promotional", "teaser" or introductory rate or payment

Regulation B, in 1974, regulated by FTC (Federal Trade Comission) & Federal Reserve

FHA is Title VIII, 1968 Civil Rights Act, enforced by HUD

Regulation C,

regulation BB

provide the availability of credit to all without regard to color, national origin, sex, marital status or age (provided applicant has capacity to cntract); to the fact that all or part of applicant's income derives from public assistance program

30 days

• 1. notice of actions..adverse, etc
• 2. reporting credit history in the names of both spouses on an account
• 3. retention of records of credit applications (records must be retaind for a minimum of 24 months period; 25 can destroy)
• 4. collection of info about applicant's race & other personal characteristics
• 5. providing applicants with copies of appraisal reports used in connection with credit transactions

yes, FHA can discriminated. ECOA can't discriminated against age.

No, can't discourage people from applying for loan

Can ask: Martial Status;

can't ask about alimony , child support, or separation maintenance income (but can use those incomes if applicant wants to); SEX, childbearing, childrearing, race, color, religion, national origin

But is required to ask about the liabilities of alimony, child support or separation maintenance; ask about applicant's permanent residence & immigration status