6 Mortgage Laws And Consumer Rights That Everyone Must Know
The government has introduced a set of mortgage laws to govern the mortgage lending process
. There are also laws to protect borrowers rights and financial information. The borrowers should be aware of these mortgage laws and consumer rights in order to deal with odd situations in mortgage.
Mortgage laws and the consumer rights
Here are the few basic
mortgage laws and consumer rights that a borrower should be aware of:
1. Fair Debt Collection Practices Act: According to this Act, debt collectors should treat the borrowers in a just manner. The Act forbids some methods of debt collection. According to FDCPA, the debt collectors cant use unfair, abusive practices while dealing with customers. It also prevents the debt collectors from divulging consumers' debt information to third parties.
2. Real Estate Settlement Procedures Act: This consumer protection law basically covers purchase mortgage, refinance loans, assumptions, improvement loans, and home equity lines of credit for 1-4 unit houses. According to RESPA, the borrowers have the right to get certain disclosures by the lenders at the various stages of lending process. It also forbids certain practices that can increase the closing costs.
3. Equal Credit Opportunity Act: This Act prevents credit discrimination on the basis of age, marital status, religion, gender, race, nationality, or receipt of public assistance. ECOA monitors content of the application, standard questions, and verbal or written opposition of an application.
4. Truth in Lending Act: This is a part of the Consumer Credit Protection Act. This law specifies that certain written disclosures must be provided to the borrowers. Some of the disclosures that borrowers are entitled to get are finance charge, annual percentage rate, total sales price, and total payment. The Act also preserves rescission rights for consumers. This is one of the most important mortgage laws and consumer rights that one must know.
5. Home Mortgage Disclosure Act: According to this Act, the lenders are required to provide public loan data on both accepted and rejected loans.
6. Fair Housing Act: This Act forbid discrimination in housing related transactions on the basis of physical disability, gender, religion, race, color, nationality, or familial status.
Finally, one of the most important mortgage laws and consumer rights is the New Homeowner's Protection Act. The Act specifies rights of homeowners and rules for lenders concerning private mortgage insurance (PMI) cancellation.
by: Cahet
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