What To Do When Problems Arise
If the actual loan numbers at the closing meeting are much higher
on the Settlement Statement than on the Good Faith
Estimate, and you are not convinced by the explanation, you
have the right not to sign.
If the home repairs or changes are not complete prior to closing,
you must stop the closing until they meet your requirements.
The most important Federal laws that protect your rights during
the closing process are:
Some lenders target homebuyers with poor credit histories who
have difficulty obtaining conventional home financing. Below is
a list of some of the complaints filed with the FTC by homebuyers.
TILA Complaints
The lender:
- Misrepresented that the total amount borrowed, upon
which interest accrues, is the amount financed that
appears on the TILA disclosure statement when, in
fact, that amount does not include the loan origination
fees.
- Misled consumers about the existence and amount
of origination fees, the interest rate, and the monthly
payments of their short-term “teaser rate” adjustable
rate mortgages (“ARMs”).
- Did not have a reasonable basis to substantiate
their claims that consumers will save money when consolidating
debts through their loans.
- Failed to provide borrowers with ARM loans with
information required by the TILA and Regulation Z
that explains ARMs.
Source: FTC Letter: www.ftc.gov/os/2002/02/tila01report.pdf
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Other laws in your state may be in force to protect you from abusive
lending practices such as high fees and high rates. High fees include
charges for items such as:
Internet Field Trip
Now you’ll have a chance to see answers to the most frequently
asked questions by other homebuyers. These answers are on the RESPA
page at the HUD Web site.
Directions
- Click the RESPA
link A window will open showing the HUD Web site for
RESPA.
- Browse the list and read the questions and answers
that interest you.
- Click the close box on the upper right corner to
return to the course.
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Now you should understand your legal rights in the
closing process. Click Next to review a summary of what you learned
in this lesson.
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