Regulation Z - Truth in Lending Loans, Summaries of Finance

Download Regulation Z - Truth in Lending Loans and more Summaries Finance in PDF only on Docsity! Charter Eff. Date 12/30/1899 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 A B D DEFINITION OF CLOSED END CREDIT DEFINITION OF FINANCE CHARGE Yes/No Comments 1. Does it appear the following are accurately disclosed: a. Finance Charge Calculation (226.4) b. Annual Percentage Rate (APR) (226.22) (Considered accurate if within 1/8 of 1%.) c. Total of Payments (226.18(h)) d. Payment Schedules (226.18(g) 2. Does it appear "credit sale" disclosures are made when required? (226.18(j)) 3. Does it appear variable-rate disclosures are made, if applicable? (226.18(f)) 4. Are required terms with explanatory language used? (226.18) 5. Does it appear the “amount financed” itemization is made or offered? (226.18(c)) 6. Does it appear all other disclosures are made? (226.18(a- r)) 7. Are disclosures grouped together and segregated from all other information? (226.17(a)(1)) 8. Does it appear disclosures are made before consummation of the transaction? (226.17(b)) 9. For closed end dwelling-secured loans subject to RESPA, does it appear early disclosures are delivered or mailed within three (3) business days after receiving the consumer's written application, and at least seven (7) business days before consummation? (226.19(a)(1)) and (226.19(a)(2)) 10. For closed end dwelling-secured loans subject to RESPA, if the APR stated in the early disclosure is not considered accurate under 226.22 when compared to the APR at consumation, does it appear corrected disclosures of all changed terms, including the APR, are provided no later than three (3) business days before consummation? (226.19(a)(2)) 11. For any mortgage loan that was sold or otherwise transferred or assigned to the credit union, does it appear the borrower was notified within 30 days of the sale? Regulation Z - Truth in Lending Loans - Closed End Credit 1 Charter Eff. Date 12/30/1899 A5Cell: Closed End Credit is defined (226.2) as credit “other than „open-end credit‟”. Open-end credit is Comment: defined as credit extended under a plan in which: 1)The creditor reasonably contemplates repeated transactions; 2)The creditor may impose a finance charge from time to time on an outstanding unpaid balance; and 3)The amount of credit extended during the term of the plan is generally made available as the outstanding balance is repaid. A6Cell: Finance charge is the cost of consumer credit as a dollar amount. It includes any charge payable by Comment: the consumer and imposed by the creditor as an incident or condition of the credit. Special Rules for Closing Agents: Fees charged are considered a finance charge only if the CU: 1) requires the particular services for which the consumer is charged; 2) requires the imposition of the charge; or 3) retains a portion of the third party charge, to the extent retained. Special Rule for Mortgage Broker Fees: Always a finance charge, even if the CU does not require the consumer to use a mortgage broker. Examples of a Finance Charge: 1) interest; 2) service or transaction charges; 3) points, loan fees, finder's fees, and similar charges; 4) appraisal, investigation, and credit report fees; 5) premiums for guarantee or insurance protecting the creditor against the consumer's default; 6) charges imposed on the CU by another person for purchasing or accepting the obligation; 7) premiums for credit life, accident, health, or loss of income insurance written in connection with a credit transaction; 8) premium for insurance against loss of or damage to property, written in connection with a credit transaction; 9) debt cancellation fees. Charges Excluded from Finance Charge: 1) application fees charged to all applicants, regardless of credit approval; 2) charges for late payments, exceeding credit limits, or for delinquency or default; 3) fees charged for participation in a credit plan; 4) seller's points; 5) real estate-related fees: a) title examination, abstract of title, title insurance, property survey; b) loan-related documents such as deeds, mortgages, settlement documents; c) notary and credit report fees; d) property appraisal fees. A12Cell: Payment schedules must show the number, amount and timing of payments (i.e. monthly, or Comment: biweekly payments). A13Cell: When a credit union sells AND finances property it owns, a special disclosure must be made for a Comment: “credit sale”. This usually occurs when a repossessed vehicle is sold and financed to a member. The total sale price, including downpayment, must be disclosed with a descriptive explanation such as “The total price of your purchase on credit , including your downpayment of $____.” A14Cell: Variable-rate disclosures regarding RESPA related loans are addressed on the Reg Z - RESPA Comment: questionnaire. Variable-rate disclosures regarding a loan NOT secured by the consumer‟s primary residence, or secured by the primary residence and maturing within one year, are: 1) Circumstances under which the rate may increase 2) Limitations on the increase 3) Effect of an increase 4) Example of the payment terms that would result from an increase 2