What Laws
Protect Your Rights
As A Borrower

Owning a home is a significant investment for most people. Over the years, state and federal laws and regulations have been established to protect potential investors and inform them of their rights as a borrower.

We feel it is important for you to be aware of your rights and to be knowledgeable of the process of home ownership. The information below was written to breifly review several of the federal laws created for your protection.

Equal Credit Opportunity Act

This regulation prohibits discrimination on the part of the lender. It ensures that all creditworthy applicants will have credit available to them without regard to race, color, religion, national origin, sex, martial 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. 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 was established to provide the public with information on lending practices to help you determine whether financial institutions are meeting the housing needs of their communities to attract private investments where needed; to discourage unsound and discriminatory lending practices.

Fair Credit Reporting Act

In order to protect your credit status, this act ensures that credit reporting agencies use fair, accurate, and confidential reporting methods. This is also your protection against unfair and inaccurate credit billing. If you are denied credit, whether for a loan or credit card, you may request from the credit reporting agency a copy of the information upon which the denial was based.

Real Estate Settlement Procedures Act (RESPA)

The purpose of this act is to ensure that consumers are provided with timely and thorough information on the nature and costs associated with obtaining a mortgage loan. Due to this act, federal regulations require that you receive a disclosure of estimated settlement costs (known as a "Good Faith Estimate") within three days of your initial loan application. RESPA was also developed to eliminate kickbacks and referral fees that might increase settlement services. In addition, it is intended to regulate the amount of money borrowers are requried to place in escrow for taxes and insurance.

Truth In Lending Act - Regulation Z

This act requires creditors to provide information to consumers about the conditions, terms, and costs of a loan. This law is administrated by the Federal Reserve Board. It 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 make an informed decision when comparing loans offered by differant lending institutions through the use of common terminology such as APR (annual percentage rate) and finance charge.

State Laws

Each state has its own laws which protect consumers

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