3.85- Explain General information about the TILA-RESPA Disclosure Rule

The TILA- RESPA Disclosure rule is, in essence, a codification of four pre-existing disclosures necessitated by TILA- RESPA for the sake of close- end credit transactions. The government’s objective was to deter dishonest crediting practices. Some sort of disincentive had to be presented hence the government enacted these regulations in 1968.

Moving on, this certain rule’s applicability extends to close- ended consumer transactions as we have seen above; and eventually classifies it into two forms. The first form is that the Loan Estimate in question must conform to the three business day rule subsequent to receipt of the borrower’s application. Secondly the second form revolves around the ‘closing disclosure’ and this sort of disclosure must be provided to the customer three business days prior to the final execution. It is paramount to appreciate that a prerequisite for the TILA RESPA rules to apply is that the transaction in question must be secured by real property; however it must be borne in mind that it applies to ‘most’ transactions of the sort. In light of the latter statement, it is easy to simply say that there are exceptions. These guidelines are not applicable to certain categories of loans.

Related Topics: What is Real Estate Settlement Procedures Act (RESPA), 12 CFR Part 1024 (Regulation X) What are the prohibitions, limitations and exemptions set by RESPA What Counts as Business Day The Loan Estimate (LE) The Closing Disclsoure (CD)

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