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Unformatted text preview: dditional credit which would cause an extension of credit to exceed an already established limit. APPLICATION
According to the law, any creditor who decides to deny an application for credit must provide the applicant with a statement of reasons, or a written notification of the applicant's right to obtain a statement of reasons. Timing – The statement of reasons may be given by the lender as a matter of course with the notice of adverse action. In most cases, this must be provided within 30 days after receiving the completed loan application. For some types of credit transactions, this time limit is longer. Some of the basic provisions of the act that affect real estate lenders are these: If applicants request, lenders must consider information provided by the borrowers indicating that a bad history of a joint account does not reflect on their credit. Lenders cannot ask about birth control practices or childbearing intentions or capabilities. Lenders cannot ask if the borrower is divorced or widowed. They may ask if the borrower is married, unmarried, or separated. For purposes of the law, unmarried means single, divorced, or widowed. Dynasty School (www.dynastySchool.com) 11-27 REAL ESTATE FINANCE
Lenders cannot ask about receiving alimony or child support unless the borrower is first notified that it need not be revealed. However, lenders may ask about obligations to pay alimony or child support. Lenders must notify applicants in writing within 30 days as to what action has been taken on their applications. In case of disapproval, the reason must be given. CHAPTER QUIZ
1. Federal Reserve Regulation Z is enforced by: A B C D 2. HUD The State Fair Employment Practices Commission The Federal Trade Commission None of the above In general, the Truth in Lending Act applies to: A B C. D. Creditors Advertisers of credit Discrimination involving credit Both “A” and “B” 3. The “Annual Percentage Rate” written in bold letters is required by the: A B C D Truth in Lending Act Federal Reserve Regulation Z Federal Consumer Credit Protection Act All of the above 4. If the loan is secured by the borrower's residence, a borrower has the right to rescind before midnight of the third business day following consummation of a contract, with t...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10