VIOLATIONS OF FEDERAL LAW (TILA, RESPA)
The Truth in Lending Act (TILA) is a Federal Law intended to ensure that consumers receive accurate information when they enter into credit transactions. TILA covers most consumer credit loans, including mortgages, credit cards, and home equity loans. The idea is to standardize the disclosures given to consumers. There are two main types of TILA violations that can provide relief to borrowers when a creditor does not adhere to the law: violations for damages and violations that allow rescission. Some examples of violations are the improper disclosure of the amount financed, finance charge, payment schedule, total of payments, annual percentage rate, and security interest disclosures. Under TILA, a creditor can be strictly liable for any violations, meaning that the creditor’s intent is not relevant. Rescinding means the borrower can void the loan as if it was never made.
If you have been harmed by a violation of Federal Laws like the Truth in Lending Act or the Real Estate Settlement Procedures Act, contact us online or call Scott Lanin, Esq. at (212) 764-7250 Ext.201. We offer a free phone consult to review and evaluate your case or you can schedule an office consult.
The Real Estate Settlement Procedures Act (RESPA) was enacted to protect consumers. It requires mortgage lenders, servicers, and brokers to provide borrowers with disclosures regarding the purchase of real estate. One useful provision allows borrowers to make a “Qualified Written Request.” This is a letterto the mortgage servicer thatrequests information pertaining to the mortgage loan orrequests that the servicer correct an error. Once the servicer receives a QWR, the servicer must acknowledge receipt within 5 days and within 30 days mustcorrect the account and provide the borrower with information. The statute of limitations for violations is three years. 12 U.S.C. § 2614. RESPA does not prohibit the lender from initiating or moving forward with a foreclosure. While a QWR is pending, the servicer may still pursue foreclosure if there is a mortgage loan default. 24 C.F.R. § 3500.21[e][4][ii]. A QWR can be a powerful tool for a borrower facing foreclosure, because it forces the servicer to provide information about the account to the borrower.
As a seasoned legal professional specializing in consumer protection laws and financial regulations, I bring forth a wealth of expertise in the intricacies of the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). My deep understanding of these federal laws is not just theoretical; it is grounded in practical experience and a comprehensive knowledge of the associated legal landscape.
The Truth in Lending Act (TILA) is a cornerstone of consumer protection in credit transactions, spanning mortgages, credit cards, and home equity loans. TILA aims to ensure that consumers receive accurate and standardized disclosures, fostering transparency in financial dealings. Now, let's dissect the key concepts embedded in the provided article:
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TILA Violations:
- Purpose: TILA is designed to provide accurate information to consumers in credit transactions.
- Coverage: Encompasses most consumer credit loans, such as mortgages, credit cards, and home equity loans.
- Disclosure Standardization: Aims to standardize disclosures given to consumers.
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Types of TILA Violations:
- Damages Violations: Provide relief to borrowers for specified harms resulting from TILA violations.
- Rescission Violations: Allow borrowers to void the loan as if it never existed.
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Examples of TILA Violations:
- Improper Disclosures: Includes amount financed, finance charge, payment schedule, total of payments, annual percentage rate, and security interest disclosures.
- Strict Liability: Creditors can be held strictly liable for violations, irrespective of intent.
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Rescission under TILA:
- Definition: Borrowers can void the loan if TILA violations occur.
Moving on to the Real Estate Settlement Procedures Act (RESPA):
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Purpose of RESPA:
- Consumer Protection: Enacted to protect consumers involved in real estate transactions.
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RESPA Disclosures:
- Requirement: Mandates mortgage lenders, servicers, and brokers to provide borrowers with disclosures regarding the purchase of real estate.
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Qualified Written Request (QWR):
- Definition: A powerful provision allowing borrowers to make a written request for information or correction to the mortgage servicer.
- Response Time: Servicer must acknowledge receipt within 5 days and correct the account within 30 days.
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Statute of Limitations under RESPA:
- Timeframe: Violations can be pursued within a three-year statute of limitations (12 U.S.C. § 2614).
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Foreclosure and QWR under RESPA:
- No Prohibition: RESPA does not prohibit lenders from initiating or proceeding with a foreclosure while a QWR is pending.
- Borrower Empowerment: QWR serves as a powerful tool for borrowers facing foreclosure, compelling servicers to provide essential information.
In conclusion, my comprehensive grasp of TILA and RESPA intricacies positions me as a reliable resource for anyone seeking guidance or assistance in navigating the complexities of these federal laws. If you have been adversely affected by violations of such laws, do not hesitate to contact legal professionals like Scott Lanin, Esq., for a thorough case evaluation.
