Reg Z must be complied with if the loan is for personal, family or household purposes and (i) equal to the Threshold Amount or less or (ii) is secured by real property or by personal property used or expected to be used as the principal dwelling of a consumer. The Threshold Amount was $69,500 as of January 1, 2024 and is adjusted each January 1 to reflect increases in the Consumer Price Index. Reg Z requires disclosures relating to the terms of the credit.
“Dwelling” under Reg Z means a residential structure that contains one to four units whether or not that structure is attached to real property. It includes a mobile home, trailer, houseboat or other personal property if it is used as a residence in addition to a single family home, condominium, cooperative or the like.
A consumer can have only one “principal dwelling” at a time. Therefore, a vacation or other second home is not the consumer’s principal dwelling, even if the consumer intends to reside there in the future. If a consumer buys or builds a new dwelling that will become the consumer’s principal dwelling within one year or upon completion of construction, the new dwelling is considered the principal dwelling when it secures the acquisition or construction loan.
Purchasers or assignees of consumer mortgage loans can be liable for claims and defenses with respect to the mortgage that the borrower could assert against the original lender. See the Notice of Assignment, Sale or Transfer of Servicing Rights form located at the end of this Chapter which is provided to the purchaser/assignee when the loan is transferred.
A TILA-RESPA Loan Estimate and Closing Disclosure must be used for most closed-end consumer mortgages including construction-only loans and loans secured by vacant land or by 25 or more acres. Home equity lines of credit, reverse mortgages, or mortgages secured by a mobile home or by a dwelling that is not attached to real property (i.e., house boat) must continue to use the prior TILA and RESPA separately. Generally, the Loan Estimate and Closing Disclosure require the disclosure of categories of information that will vary due to the type of loan, the payment schedule of the loan, the fees charged, the terms of the transaction, and State law provisions. The Loan Estimate is designed to provide disclosures that will be helpful to consumers in understanding the key features, costs, and risks of the mortgage loan for which they are applying. The Loan Estimate must be provided to consumers no later than three business days after they submit a loan application. The Closing Disclosure is designed to provide disclosures that will be helpful to consumers in understanding all of the costs of the transaction. The Closing Disclosures must be provided to consumers three business days before they close on the loan. A TILA-RESPA Integrated Disclosure Guide to the Loan Estimate and Closing Disclosure forms is available online at the Consumer Financial Protection Bureau website https://files.consumerfinance.gov