Truth in Lending Act in Detail

[Moe Bedard]

The Truth In Lending Act (“TILA”), and the Real Estate Settlement Procedures Act (“RESPA”) are violated daily by lenders and predatory lending victims are everywhere. These laws are in place to protect you, the homeowner, but yet are often completely disregarded. Your loan is probably unlawful, and you may be entitled to substantial damages whether or not you’re currently in foreclosure.

Truth in Lending Act (15 U.S.C. §§ 1601-1667f, as amended)

The federal Truth In Lending Act was originally enacted by Congress in 1968 as a part of the Consumer Protection Act. The law is designed to protect consumers in credit transactions by requiring clear disclosure of key terms of the lending arrangement and all costs. The Truth In Lending Act is designed to reduce confusion among consumers resulting from the different methods of computing interest and prevent fraud, deception and unfair business practices. It does not require creditors to calculate their credit charges in any particular way. However, whatever alternative they use, they must disclose certain basic information so that the consumer can understand exactly what the credit costs. The Truth in Lending Act is implemented by the Federal Reserve Board.

Regulation Z explains that lenders must comply with the consumer credit parts of the law.

Regulation Z applies to offers or extensions of consumer credit if four conditions are met:

1. The credit is offered to consumers.
2. Credit is offered on a regular basis.
3. The credit is subject to a finance charge (i.e. interest) or must be paid in more than four installments according to a written agreement.
4. The credit is primarily for personal, family or household purposes.
If credit is extended to business, commercial or agricultural purposes, Regulation Z does not apply.

Home Mortgages

One of the biggest lending transactions any individual is likely to enter is borrowing to purchase a home. These transactions have become more complicated in recent years. Historically, someone trying to buy a home had very few options. Often, only a traditional thirty year loan was available. Now, loans of various duration and interest rate variations are available to every home buyer. The Federal Reserve Board and the Federal Home Loan Bank Board have published a book entitled "Consumer Handbook on Adjustable Rate Mortgages " to help consumers understand the purpose and uses of adjustable rate mortgage loans. Regulation Z requires that creditors offering adjustable rate mortgage loans make a special disclosure booklet available to consumers.

Disclosure

Disclosure is generally required before credit is extended. In certain cases, it must also be made in periodic billing statements. The term "closed end credit transaction" is defined by exclusion. That is, it includes any credit arrangement (either a consumer loan or credit sale) that does not fall within the definition of an "open end credit transaction". Open end credit includes credit arrangements like revolving credit cards, where the "borrower" (that is the credit card holder) is not required to pay off the principal amount by any particular point in time. Rather, the borrower is simply charged interest periodically and is usually required only to make some minimum payment.

Under Regulation Z, disclosure must be made of the following important credit terms:

Finance Charge - This is perhaps the most important disclosure made. This is the amount charged to the consumer for the credit.

Annual Percentage Rate - This is the measure of the cost of the credit which must be disclosed on a yearly basis. The method for calculating this rate is determined the underlying transaction.

Amount Financed - This the amount that is being borrowed in a consumer loan transaction, or the amount of the sale price in a credit sale.

Total of Payments - This includes the total amount of the periodic payments by the borrower/buyer.

Total Sales Price - This is the total cost of the purchase on credit, including the down payment and periodic payments.

Evidence of compliance with the Truth In Lending requirements must be retained for at least three years after the date of disclosure. Disclosures must be clear and conspicuous and must appear on a document that the consumer may keep.

Other Features of the Truth in Lending Act

The Truth In Lending Act has other important features. If you elect to advertise credit terms, the law requires disclosure of key lending terms. Also, the law entitles the consumer the right to rescind certain credit transactions under certain circumstances, such as home equity loans.

The penalties for failure to comply with the Truth In Lending Act can be substantial. A creditor who violates the disclosure requirements may be sued for twice the amount of the total finance charge on the loan. In the case of a home mortgage, this can be a very significant amount. Costs and attorney's fees may also be awarded to the consumer. A lawsuit must be begun by the consumer within a year of the violation, but certain tolling provisions apply giving the consumer more time and up to 3 years to file suit.

[andrew panessa]

Great info!!!!

[mgdfrisco3]

What good are the Laws if No one enforces them? I am a victim of Lender fraud, forged deeds of trust filed against my home and other multiply filings of legal documents with copies of my signature or what looks like copies of my signature or mostly copies of initials on these documents wich I knew nothing about. All filed at the county assessors office against my home without my knowledge, I was foreclosed on a cancelled loan. I have declared Bankruptcy but this Lender is acutally pursuing a foreclosure Auction against my home which I still live in, I know this can't be legal. My home is in san francisco, the lender is out of san mateo county, I seriously Need a contigentcy fee Attorney to go after this predator. Please if anyone out there has any suggestions or Does anyone know how I can obtain a qualified lawyer that is familar with this kind of fraud? Thanks for your time in reading this.

[JULI]

Hi mgdfrisco3,
I also have a predatory loan, both lender and broker and Title Insurance co. look involved. Your story sounds pretty bad, I am sorry to hear this.

I agree, the laws are there, but I even spoke to a State legal services senior attorney, she told me pack your bags. And I feel like I have a good case. We have fairly good laws, regulations, in NJ but no one has really tried these cases, or the laws.

I have used an attorney over the last year or so, but he has not really gotten me anywhere. He is fee based and I have spent roughly 20k. I can't spend anymore. The loan was rescinded and the mortgage company agreed not to foreclose. Then they filed foreclosure. I called and asked what is going on? they said they would withdrawal the foreclosure. Today the day before my deadline to respond, they still had not withdrawn, and a court clerk told me if they file a default they can just sell it. Well, that really scared me. Everyone has bind so underhanded. I figured they might be waiting and just place default at the first opportunity. Called the lawyer, who was not available, and was not responding to email. I mean this may not be important to any of them, but this is our home. I can't imagine being that calless to someones home.

I called the mortgage company's attorney and he said he never got the request to cancell. Yeah well you never know, he may not be so honest. Even my county record says Lis Pendens, dicharged, but has someone elses paper work attached. After calling them and checking why this is, they said well, this is not your paperwork, No kidding that is why I am calling. They said they would take care of it. But have not.

I finally got one of the Legal Assistants, a really nice lady and she called the mortgage co and they canceled foreclosure and sent confirmation.

I still have a statute of limitations about to expire, that attorney never filed against the mortgage co and just tells me i am about out of time,

One of the attorney's I called a couple of weeks ago called today and asked me to send paperwork, it almost feels like an impossibility, he says he will take a look and if he can help he will do so quickly.

Then I might be another week along and still have to file on my own, with only a couple of weeks left.

It is a real roller coaster for the heart. But I have not given up. I will fight to the finish, I think.

What is the possibility of saving your home?
Maybe Loansafe can help. If it is illegal you could save it. Don't give up. So many people have just walked away with out a fight, maybe they don't know they can.. But if more people fight, more lawyers would be interested, and more people would save their homes.

I spoke to the Attorney associated with the site. Marshall Rosenbach, he was great, I wish we had him in NJ. He knows his stuff. I don't know where you are in relation to him, but you might want to check it our. Definitely worth your time.

Good Luck, Keep posting, I would love to hear how it works out.

[stanlaywallace]

Originally Posted by mgdfrisco3

What good are the Laws if No one enforces them? I am a victim of Lender fraud, forged deeds of trust filed against my home and other multiply filings of legal documents with copies of my signature or what looks like copies of my signature or mostly copies of initials on these documents wich I knew nothing about. All filed at the county assessors office against my home without my knowledge, I was foreclosed on a cancelled loan. I have declared Bankruptcy but this Lender is acutally pursuing a foreclosure Auction against my home which I still live in, I know this can't be legal. My home is in san francisco, the lender is out of san mateo county, I seriously Need a contigentcy fee Attorney to go after this predator. Please if anyone out there has any suggestions or Does anyone know how I can obtain a qualified lawyer that is familar with this kind of fraud? Thanks for your time in reading this.

I also feel that no laws are bad if nobody enforces them.

[magma]

my son passed away in feb., without a will,never married, no children. his brothers and myself have not made his house payments pending notification if he had credit life insurance, just found out today(long story)that he did not. however, we have received notice from the bank's attorney that the house is in default and will be sold at auction aug 5. the father and i are the heirs,(this is Texas law) but the father refuses to cooperate, he actually had not made contact with his sons since 1991 and refuses now, also. since we now must make up back payments to keep house, we are thinking just let the bank have it. but will we be in trouble on down the line. we don't know at this point what the father is going to do or not do or what the court will do, if we have to go that route. we were not going thru probate, just small estate. didn;t think it was necessary. we only need approval to settle house, vehile, and bank account and do what is necessary with those. when i spoke to the bank they informed me they could do what ever they wanted to, even if estate is in probate, they could still foreclose??