Borrower’s Rights

Throughout most of history, the concept of homeownership has been one of great importance, shared by nearly all the people of the world. Because of the value that individuals, like you, place on homeownership, there are many federal and state laws existing to support this concept.

Laws and regulations were created to protect your tights as a borrower in your quest for homeownership. As your loan officers, we feel it is important that you are aware of your tights. We want you to know that we are working in your best interest to keep you informed.

Following are explanations, in simple terms, of some of the various laws and regulations that protect your rights. As your loan officers, we will be more than happy to answer any questions and explain them in greater detail if needed.

 

Federal Laws

EQUAL CREDIT OPPORTUMTY ACT

Regulation B

This regulation was created so that all creditworthy applicants would have credit available to them without regard to race, color, religion, national origin, sex, marital status, or age; whether an applicant’s income, either all or part, is derived from public assistance; or whether an applicant has exercised any right in good faith under the Consumer Credit Protection Act. The regulation prohibits any acts by creditors that would discriminate on the basis of any of these factors. This regulation also establishes your right to be

notified by the creditor of any actions taken on your application.

 

HOME MORTGAGE DISCLOSURE ACT (HMDA) Regulation C

This regulation is intended to provide the public with information on lending practices which can be used to help determine whether financial institutions are meeting the housing needs of their communities; whether they are investing public money into communities to attract private investments where needed; and to discourage unsound and discriminatory lending practices.

 

FAIR CREDIT REPORTING ACT

The purpose of this act is to ensure that credit reporting agencies use fair, accurate, and confidential reporting methods. This protects consumers against unfair and inaccurate credit billing. If your loan is denied due to your credit status, the credit reporting agency must supply you, upon your request, with the information upon which the denial was based.

 

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA)

This act is intended to ensure that consumers throughout the country are provided with greater and more timely information on the nature of the costs associated with getting a mortgage loan. As a result of this act, federal regulations require that, within three days of your initial loan application, you receive a disclosure of estimated settlement costs on what is known as a "Good Faith Estimate." RESPA was also created to eliminate kickbacks and referral fees that might increase settlement costs to the borrower due to unnecessary settlement services. In addition, it is intended to regulate the amount of money borrowers are required to place in escrows for taxes and insurance.

 

TRUTH IN LENDING ACT

Regulation Z

This act requires creditors to disclose information to consumers about the conditions, terms, and costs of a loan. The regulation also ensures the right of a consumer to cancel some credit transactions involving a lien on the consumer’s principal residence. The intent of this act is to help you better understand loan transactions, and to assist you in comparing loans offered by different lending institutions through use of common terminology such as "annual percentage rate" (APR), and "finance charge", to name a few.

 

State Laws

In addition to the rights provided to you under federal law, each state has its own laws which protect consumers. These laws vary from state to state. You can ask Charter Financial about any state specific laws and the rights that are guaranteed by those laws.