Among the more interesting of the Federal Reserve proposals for amending the Truth in Lending Act (TILA) is one to expand the disclosures required at application. The purpose is to encourage mortgage borrowers to shop before they commit themselves. The major new disclosure is one called "Key Questions to Ask About Your Mortgage." The heading atop the list of key questions states, "The only way to make sure you get the best possible loan terms is to talk to several lenders: Shop, Compare, Negotiate." This is a great idea, except that the seven questions posed by the Fed will be answered in the same way by every lender. I will illustrate with answers to the first three questions that would work for every lender. Fed: "Can my interest rate increase?" My answer: It can if you select an adjustable-rate mortgage (ARM). Fed: "Can my monthly payment increase?" My answer: It can if you select an ARM, or a fixed-rate mortgage (FRM) with an ...
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