The Truth in Lending Act, or Reg Z [C.F.R. Part 1026] covers, among other things, residential mortgage transactions. A “residential mortgage transaction” is one in which a lien is created or retained on a consumer’s “principal dwelling” to finance the acquisition or initial construction of that dwelling.
In order for residential mortgage loans to be eligible for purchase by Freddie Mac, Fannie Mae, or Ginnie Mae, to be guaranteed by the Veteran’s Administration or to be insured by the Federal Housing Administration certain special forms must be used and procedures followed. Each governmental agency should be contacted to ensure underwriting and documentation compliance.