The Truth In Lending Act

According to a recent survey in the United States, more than 79% properties are financed by the financial organizations and the owner of the property has taken a legal mortgage in that property. Hundreds of lenders are ready to approve a mortgage loan even after the fall of the sub prime market in US because it is one of the most profitable secured lending for them.

To govern the lending process in US Mortgages the Government has laid down some basic rules which restrict the lenders to practice any unfair means which will go against the interest of the borrowers. The personal and financial information of the borrowers are kept confidential and under no circumstances they are shared with a third party. To govern the process of Mortgage lending in US the Truth In Lending act was established in 1968.

Truth in lending act is a part of the consumer credit protection act of the federal legislation which suggests for few written disclosure in the mortgage document.

According to the law, the disclosure documents need to have clear explanation of the Finance Charges, Total Financed amounts, the total amount to be repaid, Net sales price and the annual percentage rate for the lending. These facts helps the borrowers to have a clear understanding of the mortgage and the total amount of money they need to repay the lenders at the end of the mortgage term.