Listed below is a brief summary of laws that a lender should be familiar with before originating a Texas home equity loan.
Adjustable Rate Loan Program Disclosure. For each program the consumer expresses an interest in, he or she should be provided a disclosure, even if it is later in the loan process. The program disclosure should be provided by the lender in whose name the loan will close. This disclosure should be provided at the time of application or before the borrower pays a non-refundable fee, whichever is earlier. [12 CFR § 226.19(b)]
Consumer Handbook on Adjustable Rate Mortgages. This disclosure is provided by the lender, in whose name the loan will close to the consumer that has applied for credit. This disclosure is provided at the time of application or before the consumer pays a non-refundable fee, whichever is earlier. [12 CFR § 226.19(b)]
Gramm-Leach-Bliley Act. This disclosure is provided by the lender at the time of establishing a Customer Relationship with a Consumer and advises the consumer of the lender’s privacy policy. [15 USC §§ 6801 - 6809]
TILA-RESPA Loan Estimate This disclosure is provided by the lender in whose name the loan will close. It is provided at the time of application, or mailed within three business days, after application is received or prepared. If an application for mortgage credit is denied before the end of the three business day period following application, the Good Faith Estimate disclosure is not required. [Regulation Z and X, 24 § 3500.7]
HELOC Disclosures. A HELOC brochure and HELOC product disclosure must be provided in compliance with 12 CFR 226.5b.
If a Particular Provider of a settlement service is required by Lender. This disclosure is provided by the lender in whose name the loan will close and should accompany the TILA-RESPA Estimate. [RESPA - Regulation X, 24 § 3500.7(e)]
Mortgage Servicing Disclosure Statement. This disclosure does not have to be signed by the consumer. However, most lenders and investors still require consumer signatures which is the best evidence that the disclosure was provided. The mortgage servicing disclosure statement should be provided by the lender in whose name the loan will close at the time of application, if application is made in person, otherwise it should be mailed within 3 business days after receipt of the application. [RESPA - Regulation X, 24 § 3500.21]
Special Information Booklet. This booklet is provided by the lender at time of application, or mailed within three business days after application is received. A copy of the booklet must be provided to only one applicant when two or more persons apply together for a loan. If the application for mortgage credit is denied before the end of the three business day period following receipt of the application, the booklet does not have to be provided. [RESPA - Regulation X, 24 CFR§ 3500.6]
Notification of Action Taken on Application. This disclosure is provided by the lender that makes the credit decision. It is provided within 30 days after receipt of completed application and communicates loan approval, a counteroffer or the adverse action taken (i.e. loan denial). [Equal Credit Opportunity Act (“ECOA”) - 15 USC § 1691 / Regulation B - 12 CFR § 202.9]
Notice of Right to Receive Copy of Appraisal. This notice is provided by lender that makes the credit decision. It is provided anytime during the application process, but no later than the date the Notification of Action Taken is provided. [ECOA - 15 USC § 1691 / Regulation B - 12 CFR § 202.14]
Notice to the Home Loan Applicant and Credit Score Disclosure. The credit score disclosure is provided by lender if the consumer’s credit score was used in making the credit decision. It is provided as soon as reasonably practicable. [The Fair and Accurate Credit Transactions Act of 2003 (“FACTA”) § 212 (c) / The Fair Credit Reporting Act (“FCRA”) - 15 USC §600, § 609(g)]
Affiliated Business Arrangement Disclosure Statement. The affiliated business disclosure is provided by the lender at the time any referral is made to an affiliated service provider. [RESPA - Regulation X, 24 §3500.15]
Texas Mortgage Broker Disclosure & Texas Mortgage Broker Dual Role Disclosure. This disclosure is provided by the Texas Mortgage Broker at the time of application. [Tex. Fin. Code § 156.004]
Texas Mortgage Broker Interest Rate Lock-in Fee Disclosure. This disclosure is provided by the Texas Mortgage Broker before charging or receiving a fee for locking in an interest rate. [Tex. Fin. Code § 156.304(b)]
Section 32 Disclosure This disclosure is provided by the lender for high-cost loans at least three days prior to closing. There is an additional high-cost notice that is provided at closing. [Regulation Z - Truth in Lending - 12 CFR §§ 226.31, 226.32]