Good Faith Estimates Laws and Regulations

The Truth in Lending Act (TILA), Title I of the Consumer Credit Protection Act, Regulation “Z” protects consumers by requiring that lenders and other creditors must disclose the terms and costs of credit to consumers. The following types of credit are covered under these regulations:

• Credit that is offered or extended to consumers that is the subject of a finance charge or is payable by a written agreement in more than four installments

• Credit that is used primarily for personal, family personal, family or household purposes and the loan balance equals or exceeds $25,000.00 or is secured by an interest in real property or a dwelling.

Disclosure Violations that may have Caused Foreclosure

Disclosures must be clear, conspicuous and disclosed on a document that the consumer can keep. If the consumer has not been given all of the required disclosures as to the cost and terms of the loan, they may not be able to afford the loan and could default resulting in the foreclosure of their home.

There are strict and substantial penalties for disclosure violations. Common disclosure violations include the failure to provide a Good Faith Estimate (GFE) and Final Disclosure Statement containing the following:

Disclosure violations can result in a borrower entering into a loan that they cannot afford to repay causing them to default on their mortgage and losing their home to foreclosure.

Help from an Attorney 

If you believe your lender violated TILA laws, you should consult with an attorney. An attorney can perform a forensic loan audit. If the attorney finds violations, you may be able to rescind your loan. Other common remedies for TILA violations that may be asserted by you with the advice of your attorney include:

• A creditor who violates the disclosure requirements may be sued for twice the amount of the finance charge.
• Costs and attorney's fees may also be awarded to the consumer.
• A lawsuit must be begun by the consumer within a year of the violation. However, if a creditor sues the borrower more than a year after their violation date, violations of the Truth In Lending Act can be asserted as a defense. For instance, if your lender sues you in a foreclosure action, your attorney may assert the violations of the Act as a defense.