Laws That Mortgage Bankers And Consumers Must Be Aware Of
When a company or an individual originates mortgages
, then that company or individual is called a mortgage banker. In order to fund mortgages, these lenders use their own funds or they may also use the funds that they borrow from warehouse lenders. The chief business of a mortgage banker is to earn the fee that is associated with the origination of the loan. A mortgage bank provides you with mortgage loans directly. It is a state licensed institution that gives you loan from its own capital.
There are some
laws mortgage bankers must consider and you should be aware of. Some of these laws are as follows. This knowledge may help you look for a good mortgage banker.
1. Truth in Lending Act: This act came into being in 1968. It is a federal law and is actually meant to protect you (the consumer) by making clear, the terms of lending. The main aim of the act is to ensure the informed use of consumer credit. This is done by requiring disclosures from the lenders and also by standardizing the way in which costs that are associated with borrowing are disclosed and calculated. Disclosures such as the amount they charge you for a loan, the actual amount that you are borrowing, the Annual Percentage Rate and the total payments that you will need to make over the term of the loan, are all to be disclosed.
2. Secure and Fair Enforcement for Mortgage Licensing Act: This act also called SAFE was passed on July 30, 2008. This act is designed to protect consumers such as you from fraud. It strives to achieve this by the setting of minimum standards for the process of licensing and registration of mortgage loans that are state licensed. The act helps ensure that loan originators or mortgage bankers act in your best interest. It provides you with an easy access to the employment history of a loan originator. It also helps in judging the accountability of loan originators.
3. Fair housing Act: Like the Truth in lending Act this act too was adopted in 1968. The act protects consumers like you from any discrimination in terms of sex, color, race, region, national origin etc, when it comes to purchasing a house or taking out a mortgage.
These mortgage laws help you to protect yourself from the mal practices that may lead to your exploitation. Thus, you must be aware of these so that you are not cheated of anything.
by: Cahet
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