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Truth in Lending: 5.11.2.8.6.1 Relationship to loan estimate

Using the master heading “Closing Cost Details,”1026 page two of the closing disclosure form must contain an itemization of all loan costs associated with the transaction broken down into two subheadings: “Loan Costs”1027 and “Other Costs,”1028 followed by totals.1029 This section differs from that in the loan estimate form because it must include columns showing whether the charge was borrowe

Truth in Lending: 5.11.2.8.6.2 “Loan Costs” subsection

Under the heading “Loan Costs,” the creditor must itemize each amount into the following categories: “Origination Charges”; “Services Borrower Did Not Shop For”; and, “Services Borrower Did Shop For.”1035 Next to each of these subheadings, the creditor must disclose the sum of the charges in that section that were paid by the borrower at or before closing.1036 Following the itemization of charges in each category, the creditor must show which fees were paid by the borrower, the seller, and o

Truth in Lending: 5.11.2.8.6.4 Totals

The “Total Closing Costs” are to be disclosed on line J, representing the sum of all closing costs (both the “Loan Costs” and the “Other Costs” subsections) paid by the borrower at or before closing.1071 The “Closing Cost Subtotals” line appears under “Total Closing Costs.” This line includes the subtotals of all closing costs that were borrower-paid, seller-paid, or paid by others.1072 The amount of any “generalized” lender credits, disclosed as a negative number, labeled “Lender Credits” i

Truth in Lending: 5.11.2.8.7.1 General

This section of the closing disclosure form starts on page four.1138 All of the remaining information the creditor must provide appears under the master heading, “Additional Information About This Loan” and spans pages 4 and 5 of the closing disclosure form.1139

Truth in Lending: 5.11.2.8.7.2 “Loan Disclosures” subsection

Under the heading “Loan Disclosures,” information about “Assumptions,” “Demand Feature,” “Late Payment,” “Negative Amortization,” “Partial Payments,” “Security Interest,” and “Escrow Account” must appear on this page.1140 Under the label “Assumption,” the creditor must include a statement of whether a subsequent purchaser may be permitted to assume the remaining loan obligation on its original terms.1141 Under the label “Demand Feature,” the closing disclosure form must state whether the leg

Truth in Lending: 5.11.2.8.7.5 “Loan Calculations” subsection

Next, on page 5 of the closing disclosure form, the “Additional Information About This Loan” section must contain a “Loan Calculations” table.1167 In the column on the left side and on the first row, the table must state the “Total of Payments,” with a statement that the disclosure is the total the consumer will have paid after making all payments of principal, interest, mortgage insurance, and loan costs, as scheduled.

Truth in Lending: 5.11.2.8.7.6 “Other Disclosures” subsection

The closing disclosure form must also include “Other Disclosures” in the “Additional Information About This Loan” section.1180 Here, the creditor must provide certain information about the “Appraisal,” “Contract Details,” “Liability After Foreclosure,” “Refinance,” and “Tax Deductions.”

Truth in Lending: 5.11.2.8.7.7 “Questions” subsection

This part of the closing disclosure form must include a separate notice, labeled “Questions?,” that directs the consumer to use the contact information provided on the same page and that contains the CFPB’s website link to obtain more information or to file a complaint.1190

Truth in Lending: 5.11.2.8.7.8 “Contact Information” subsection

Under “Contact Information,” the closing disclosure form must contain a table in which the creditor must list specific information for each creditor (labeled “Lender”), the mortgage broker, the consumer’s real estate broker, the seller’s real estate broker, and the settlement agent participating in the transaction.1191 This information includes:

Truth in Lending: 5.11.2.8.7.9 Signature statement

Finally, the closing disclosure form ends on page five with the heading “Confirm Receipt.” Here, if the creditor includes signature lines for the borrowers, the creditor must state: “By signing, you are only confirming that you have received this form.

Truth in Lending: 5.11.2.8.8 Form of closing disclosure

Section 1026.38 of Regulation Z ends with rules addressing headings and labels, use of the model forms in appendix H, headings and labels, rounding of dollar amounts and percentages, unit-periods, modifications to the model forms due to translations into languages other than English, logos or slogans, attachment of the creditor’s business card, and the inclusion of administrative information.1196 More importantly, section 1026.38(t) imposes the clear and conspicuous, grouping, and segregation rules that apply to other closed-end consumer cr

Truth in Lending: 5.11.2.9 Remedies

The general rules regarding the availability of actual and statutory damages under TILA are as follows: Actual damages, attorney fees, and costs are available for all violations that arise from requirements that appear in parts B (credit transactions), D (credit billing), and E (consumer leasing) of TILA.1201 Relevant to loan origination disclosures, only a violation of a closed list of disclosure requirements that appear in part B of TILA triggers statutory damages under TILA.1202 Whether a

Truth in Lending: 5.12.1.1 Overview

In 1981, Regulation Z was revised to require a few disclosures for all variable rate transactions.1211 Those regulations—which apply only to transactions that are not secured by the consumer’s principal dwelling and to transactions that are secured by the principal dwelling but have a term of one year or less—are discussed at § 5.12.2, infra. Separate rules, discussed

Truth in Lending: 5.12.2.2 When Must Variable Rate Disclosures Be Made

These disclosures must be made in every transaction in which the terms of the legal obligation allow the creditor to increase the annual percentage rate originally disclosed to the consumer that are not covered by the ARM requirements.1216 It includes not only increases in the interest rate but also increases in any of the components of the annual percentage rate, such as the rate of required credit life insurance.

Truth in Lending: 5.12.2.8 Disclosure of an Example of the Payment Terms That Would Result from an Increase

The creditor must disclose in variable rate transactions a hypothetical example of the effects of an increase in the annual percentage rate. The creditor can provide either one of two types of hypothetical examples.1248 The creditor can provide a specific example that directly reflects the terms and conditions of that particular transaction; for example, “if the interest rate increases by 1% in one year, your regular payment would increase to $594.51.”1249

Truth in Lending: 5.13.1.1 Purpose

The creation of expanded disclosures for ARMs arose from two concerns. The first was that different regulatory agencies imposed different ARM disclosure requirements on lenders under their jurisdiction, which made things difficult for both consumers and lenders. The second concern was to assure that consumers had some understanding of the potential impact of the adjustable-rate mortgage that secured their homes.

Truth in Lending: 5.13.1.2 Disclosure in Note

Though not required by the Act, creditors generally include a description of the consumer’s repayment obligation in the loan note. The note ordinarily will describe the change dates, the margin, the initial interest rate and how to calculate the rate at each change, as well as information about the payment amounts, due dates, late charges, and the like. To decide whether the consumer received the loan product that matches the ARM disclosures, the loan note and any riders must be reviewed.1253