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Truth in Lending: Amendment History
[66 Fed. Reg. 17,341 (Mar. 30, 2001); 72 Fed. Reg. 63,476 (Nov. 9, 2007); 73 Fed. Reg. 44,613 (July 30, 2008); 75 Fed. Reg. 58,535 (Sept. 24, 2010) (EFFECTIVE DATE NOTE: Effective Apr. 1, 2011); 75 Fed. Reg. 66,583 (Oct. 28, 2010) (EFFECTIVE DATE NOTE: Effective Apr. 1, 2011); 76 Fed. Reg. 43,112 (July 20, 2011); 76 Fed. Reg. 79,772 (Dec. 22, 2011); 78 Fed. Reg. 6967 (Jan. 31, 2013); 78 Fed. Reg. 11,017 (Feb. 14, 2013); 78 Fed. Reg. 11,413 (Feb. 15, 2013); 78 Fed. Reg. 32547 (May 31, 2013); 78 Fed. Reg. 60,442 (Oct. 1, 2013); 80 Fed. Reg. 59,944 (Oct. 2, 2015); 81 Fed.
Truth in Lending: Paragraphs 1 and 2
1. Disclosures not applicable.661 The disclosures required by § 1026.37 are required to reflect the terms of the legal obligation between the parties, and if any information necessary for an accurate disclosure is unknown to the creditor, the creditor shall make the disclosure in good faith, based on the best information reasonably available to the creditor pursuant to §§ 1026.17(c) and 1026.19(e). See comments 17(c)(1)-1, 17(c)(2)(i)-1 and -2, and 19(e)(1)(i)-1.
Truth in Lending: 37(a)(3) Creditor.
1. Multiple creditors. For transactions with multiple creditors, see § 1026.17(d) and comment 17(d)-1 for further guidance. The creditor making the disclosures, however, must be identified as the creditor for purposes of § 1026.37(a)(3).
Truth in Lending: 37(a)(4) Date issued.
1. Applicable date. Section 1026.37(a)(4) requires disclosure of the date the creditor mails or delivers the Loan Estimate to the consumer. The creditor’s method of delivery does not affect the date issued. For example, if the creditor hand delivers the Loan Estimate to the consumer on August 14, or if the creditor places the Loan Estimate in the mail on August 14, the date disclosed under § 1026.37(a)(4) is August 14.
Truth in Lending: 37(a)(5) Applicants.
1. Multiple consumers. If there is more than one consumer applying for the credit, § 1026.37(a)(5) requires disclosure of the name and the mailing address of each consumer to whom the Loan Estimate will be delivered. If the names and mailing addresses of all consumers applying for the credit do not fit in the space allocated on the Loan Estimate, an additional page with that information may be appended to the end of the form. For additional information on permissible changes, see § 1026.37(o)(5) and its commentary.
Truth in Lending: 37(a)(6) Property.
1. Alternate property address. Section 1026.37(a)(6) requires disclosure of the address including the zip code of the property that secures or will secure the transaction. A creditor complies with § 1026.37(a)(6) by disclosing a complete address for purposes of the U.S. Postal Service. If the address is unavailable, a creditor complies with § 1026.37(a)(6) by disclosing the location of such property including a zip code, which is required in all instances. Location of the property under § 1026.37(a)(6) includes location information, such as a lot number.
Truth in Lending: 37(a)(7) Sale price.
Editor’s Note662
Truth in Lending: 37(a)(8) Loan term.
1. Partial years.
Truth in Lending: 37(a)(9) Purpose.
1. General.664 Section 1026.37(a)(9) requires disclosure of the consumer’s intended use of the credit. In ascertaining the consumer’s intended use, § 1026.37(a)(9) requires the creditor to consider all relevant information known to the creditor at the time of the disclosure. If the purpose is not known, the creditor may rely on the consumer’s stated purpose. The following examples illustrate when each of the permissible purposes should be disclosed:
Truth in Lending: 37(a)(10) Product.
1. No features. If the loan product disclosed pursuant to § 1026.37(a)(10) does not include any of the features described in § 1026.37(a)(10)(ii), only the product type and introductory and first adjustment periods, if applicable, are disclosed. For example:
Truth in Lending: 37(a)(11) Loan type.
1. Other. If the transaction is a type other than a conventional, FHA, or VA loan, § 1026.37(a)(11)(iv) requires the creditor to disclose the loan type as “Other” and provide a name or brief description of the loan type. For example, a loan that is guaranteed or funded by the Federal government under the Rural Housing Service (RHS) of the U.S. Department of Agriculture is required to be disclosed under the subcategory “Other.” Section 1026.37(a)(11)(iv) requires a brief description of the loan type (e.g., “RHS”).
Truth in Lending: 37(a)(12) Loan identification number (Loan ID #).
1. Unique identifier. Section 1026.37(a)(12) requires that the creditor disclose a loan identification number that may be used by the creditor, consumer, and other parties to identify the transaction, labeled as “Loan ID # .” The loan identification number is determined by the creditor, which number may contain any alpha-numeric characters.
Truth in Lending: 37(a)(13) Rate lock.
1. Interest rate. For purposes of § 1026.37(a)(13), the interest rate is locked for a specific period of time if the creditor has agreed to extend credit to the consumer at a given rate, subject to contingencies that are described in any rate lock agreement between the creditor and consumer.
Truth in Lending: 37(b) Loan terms.
1. Legal obligation. The disclosures required by § 1026.37 must reflect good faith estimates of the credit terms to which the parties will be legally bound for the transaction. Accordingly, if certain terms of the transaction are known or reasonably available to the creditor, based on information such as the consumer’s selection of a product type or other information in the consumer’s application, § 1026.37 requires the creditor to disclose those credit terms.
Truth in Lending: 37(b)(2) Interest rate.
1. Interest rate at consummation not known.668 Where the interest rate that will apply at consummation is not known at the time the creditor must deliver the disclosures required by § 1026.19(e), § 1026.37(b)(2) requires disclosure of the fully-indexed rate, defined as the index plus the margin at consummation.
Truth in Lending: 37(b)(4) Prepayment penalty.
1. Transaction includes a prepayment penalty. Section 1026.37(b)(4) requires disclosure of a statement of whether the transaction includes a prepayment penalty. If the transaction includes a prepayment penalty, § 1026.37(b)(7) sets forth the information that must be disclosed under § 1026.37(b)(4) (i.e., the maximum amount of the prepayment penalty that may be imposed under the terms of the loan contract and the date on which the penalty will no longer be imposed). For an example of such disclosure, see form H-24 of appendix H to this part.
Truth in Lending: 37(b)(5) Balloon payment.
1. Regular periodic payment. If a payment is not itself a regular periodic payment and is more than two times any one regular periodic payment during the loan term, then it is disclosed as a balloon payment under § 1026.37(b)(5). The regular periodic payments used to determine whether a payment is a balloon payment under § 1026.37(b)(5) are the payments of principal and interest (or interest only, depending on the loan features) specified under the terms of the loan contract that are due from the consumer for two or more unit-periods in succession.
Truth in Lending: Paragraph 1
1. Periods not in whole years.670 For guidance on how to disclose increases after consummation that occur after a number of months less than 24 but that do not equate to a number of whole years or within a number of days less than a week, see the guidance provided in comment 37(a)(10)-3. For increases that occur after more than 24 months, see the guidance provided in comment 37(b)(8)-1.
Truth in Lending: 37(b)(6)(i) Adjustment in loan amount.
1. Additional information regarding adjustment in loan amount. A creditor complies with the requirement under § 1026.37(b)(6)(i) to disclose additional information indicating whether the maximum principal balance is potential or is scheduled to occur under the terms of the legal obligation by using the phrase “Can go as high as” or “Goes as high as,” respectively.
Truth in Lending: 37(b)(7) Details about prepayment penalty and balloon payment.
Paragraph 37(b)(7)(i).