© OnCourse Learning Chapter 12 : The Loan and the Consumer.

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© OnCourse Learning Chapter 12 : The Loan and the Consumer

 A federal law that requires certain disclosures when extending or advertising credit. © OnCourse Learning TRUTH-IN-LENDING ACT

 Federal regulations that implement the enforcement of the Truth-in-Lending Act. REGULATION Z © OnCourse Learning

 Truth-in-Lending Act  Requires lender to show the borrower the cost of the credit.  Requirements include:  Amount financed  Finance charge  Annual percentage rate  Total payments REGULATION Z © OnCourse Learning

 Annual percentage rate combines the interest rate with the other costs of the loan into a single figure that shows the true annual cost of the loan. APR © OnCourse Learning

 Borrower’s right to cancel a credit transaction.  Three business days after signing to back out.  Includes Saturdays.  Does not apply to credit used for the acquisition or initial construction of your principal dwelling. RIGHT TO RESCISSION © OnCourse Learning

Down payment Any payment Number of payments Period of payments Amount of any finance charge, or statemen t: no charge for credit Cash price or the amount of the loan Down payment (or none) Number, amount, frequency of payments Annual percentage rate (APR) Deferred payment price or total payments Mention theseTriggers disclosure Triggering Items and Disclosures © OnCourse Learning

Borrower Property Title Lenders Qualify: Loan Process © OnCourse Learning

 Refusing to make loans in certain areas. REDLINING No Loans! $ $ $ © OnCourse Learning

 Provides lender with independent means of checking borrower’s credit history.  Fair Credit Reporting Act – consumer right to their file at credit bureau.  Credit Scoring – method used today to evaluate credit risk. CREDIT REPORT © OnCourse Learning

 The Flip  The Old Switch  The Contractor’s Scheme  The Ultimate Lie  The Innocent Investor  Trust Me  Identify Thief  Fake Check/Fast Closing © OnCourse Learning PREDATORY LENDING AND MORTGAGE FRAUD

 APR  Credit report  Fair Credit Reporting Act  Finance charge  Liquid asset  Redlining  Regulation Z  Truth-in-Lending Act KEY TERMS © OnCourse Learning

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