Truth In Lending Analysis
Understanding Your Rights and Protecting Against Predatory Lending
McDonnell Property Analytics (“MPA”) offers a comprehensive Truth In Lending Analysis service designed to scrutinize your lender’s preliminary and final Truth In Lending Disclosure Statements or TRID Disclosures. Our analysis aims to ensure:
Transparency in Loan Terms
We check for any discrepancies between the loan terms presented during the application and those at closing, ensuring there are no "bait and switch" tactics.
Accurate Finance Charges
We review to confirm that finance charges are correctly disclosed, particularly when understatement may trigger the extended right to rescind the transaction for up to three years.
Protection Against Predatory Lending
We assess your mortgage terms to identify predatory lending characteristics, offering a crucial defense against unscrupulous practices.
The Significance of the Truth In Lending Act (TILA)
Undoubtedly, one of the most pivotal consumer protection laws is the Truth in Lending Act (TILA), codified at 15 U.S. Code § 1601, et seq. TILA’s implementation and enforcement fall under Regulation Z, 12 C.F.R. § 1026, et seq., overseen by the Consumer Financial Protection Bureau (CFPB).
For most residential mortgage transactions, the regulatory framework commences at 12 C.F.R. § 1026.17, outlining general disclosure requirements. Particularly crucial for consumers is 12 C.F.R. § 1026.23, addressing the right to rescind a mortgage loan used to refinance a primary residence.
This section provides:
“In a credit transaction in which a security interest is or will be retained or acquired in a consumer’s principal dwelling, each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind the transaction…until midnight of the third business day following consummation, delivery of the notice required by paragraph (b) of this section, or delivery of all material disclosures, whichever occurs last.
If the required notice or material disclosures are not delivered, the right to rescind shall expire 3 years after consummation, upon transfer of all of the consumer’s interest in the property, or upon sale of the property, whichever occurs first.” (Emphasis supplied).
When valid grounds exist for rescinding a consumer mortgage transaction, you can simply send a notice of rescission to the creditor. This action leads to the automatic cancellation of the note and mortgage by law.
Rescission eliminates all imposed interest and finance charges, effectively voiding the mortgage and potentially halting foreclosure. Within 20 days, the creditor must return any funds or property related to the transaction and take necessary actions to terminate the security interest.
Real-Life Examples of Protection
Bait and Switch Scheme
MPA’s California Client provided us with a preliminary Truth In Lending Disclosure Statement and an Adjustable Rate Note. By comparing the two documents, we revealed that the Truth In Lending Disclosure Statement had understated the Finance Charge by $1,466,317.30. This discovery showcased a bait and switch in the loan terms, leading the Judge to declare the Note and Deed of Trust unenforceable.
Predatory Lending
MPA’s Washington Clients faced foreclosure and sought assistance. Our Truth In Lending Analysis revealed that they had unknowingly signed onto a predatory, high-cost, adjustable rate mortgage loan. We illustrated this fraud by comparing the preliminary and final Truth In Lending Disclosure Statements. The Judge found the scheme so egregious that he declared the Note and Deed of Trust null and void, erasing the debt entirely.
The Vital Role of TILA Protection
These examples demonstrate how enforcing the protections of the Truth In Lending Act serves as consumers’ first line of defense against predatory lenders and abusive loan servicers. MPA’s skilled analysts possess the expertise and tools to identify TILA violations and substantiate them in court.
By structuring the content in this manner, you create distinct sections for different aspects of the Truth In Lending Analysis service, making it easier for visitors to comprehend the details and significance of the service.
Learn more about McDonnell Property Analytics
To learn more about how McDonnell Property Analytics may be of assistance to you, please explore our website and check out our case studies. You can contact us at (774) 323-0892.
