AgentMortgage

What isn’t disclosed under Truth in Lending Act?

Beware of ambiguously worded prepayment penalty statement

"Is there anything important that I ought to know when I shop for a mortgage that lenders are not required to disclose to me under Truth in Lending?" Great question. I have identified five pieces of information that meet your specs. Not all apply to every borrower, but some do. Does my loan have a prepayment penalty clause? This is a biggie that applies to every borrower. Some might be puzzled as to why I included it, since there is a statement about prepayment penalty on the TIL form. Unfortunately, the way the statement is worded is so ambiguous and its placement on the form so distracting that untold numbers of borrowers sign their TIL without every realizing that they are subject to a penalty. Readers interested in this classic illustration of how not to disclose will find the details on my Web site ("Disclosure of Prepayment Penalty"). All you must remember is that if the TIL says that you "may have to pay a penalty," it means you will have to pay a penalty. What Are Total Le...