www.overtonfactor.com
Username:
 
Password:
Search All RealMega:

Powered By RealMega and MonsterDaata
.RealMega Home
.Monster Daata Home
.Neighborhood Find
.Monster Domain
.Mega Community
.Real Office
.Real Vision
.Real Venue
.Mega News Network
.Real Advisors
.Home Responder
.Mega Factor
.Factor Preview
.Real Neighbor
.Flash Mega
.Real Profiles 
.Multi MLS Search
.Real Owner
.RealMega Presentation
.Buy/Sell Multimedia
.Mega Hosters
.RealMega Site Map
.RealMega Site Index
.RealMega Database
.Contact Information
.Press Release
.RealMega 1 Blimp

Join RealMega
.Free - Join RealMega
.My RealMega
.Contact RealMega
.Send Us Feedback
.Recommend Us
.Mega FAQ
.Link to RealMega
.Mega Banner Links
.Mega Guestbook
.Mega Guestmap
.Mega Forum Page
.Mega Connects
.Make RealMega Home
.Spam Policy
.Advertising
.Terms of Use
.Privacy
.Recommend Us Cards

Entertainment
Entertainment Trivia Free Cards Horoscope Planetarium
Free Entertainment
From RealMega

Monster Domain Tools
Monster Domain Tools
Domain Names & Other
Related Products

Shopping
Shopping Books Real Estate School Web Hosting Domain Names Values
Your One Stop Shop
From RealMega!

Make Us Your Home!
Bookmark Us
Make RealMega My Homepage!

To see how to make RealMega the first page you see when you open up your web browser on your computer Click Here

Mega Selling
Mega Selling
Useful Homesellers Information

Mega Buying
Mega Buying
Useful Homebuyers Information

Real Vision / Real Daata
Real Vision and Real Daata
Real Vision & Real Daata

Real Office
Real Office Tools
Virtual Office Resources

Including:
Calendar
Address Book
Notepad
To Do List
and much more...

Mega Funnies
Image of the Hour

Send Your Friends One Of Our Free Mega Funnies Cards!
Click Here

Real Calculator
Real Calculator
12 Step System

Swami Knows
Swami Knows
Entertaining Advice

Mega Trivia
Mega Trivia Games
Entertaining Trivia

Mega News Network
Mega News Network
Netowrk News Source

Financial Information
Mega Financials
Financial Information

Overton Factor
Lowell Overton Lowell Overton
Lets Talk About Home Ownership

Mega Glossaries
Mega Glossaries
Mega Glossary Terms

Real Horoscope
Aries - From 21 March to 19 April Taurus - From 20 April to 20 May Gemini - From 21 May to 21 June
Cancer - From 22 June to 22 July Leo - From 23 July to 22 August Virgo From 23 August to 22 September
Libra - From 23 September to 23 October Scorpio - From 24 October to 22 November Sagittarius - From 23 November to 21 December
Capricorn - From 22 December to 19 January Aquarius - From 20 January to 18 February Pisces - From 19 February to 20 March

Weather
Mega Weather

Free Local and National Weather Reports!

Enter Your City, State, State or Zipcode:


Current Moon Phase
Current Moon Phase

World Weather From Mega Forecast

Real Book Source

Real Book Source

  
HIGH FEE/HIGH RATE LOANS
Printer Friendly Format | Tell A Friend | TeamOverton1 Media | OvertonFactor Home

HIGH FEE/HIGH RATE LOANS

FINANCING PROTECTION LAWS WORTH KNOWING

QUESTION:
Do you know about the "Home Ownership and Equity Protection Act of 1994”?

YOU SHOULD!

The law addresses certain deceptive and unfair practices in home equity lending.

It amends the Truth in Lending Act (TILA) and establishes requirements for certain loans with high-rates and/or high-fees.

The rules for these loans are contained in Section 32 of Regulation Z, which implements the TILA, so the loans also are called "Section 32 Mortgages”.

Listed below are what loans are covered, the law's disclosure requirements, prohibited features, and actions you can take against a lender who is violating the law.

Covered Loans:

The law covers loans that meet the following tests:

  1. The annual percentage rate (APR) exceeds by more than 10 percentage points the rates on Treasury securities of comparable maturity; or
  2. The total fees and points payable by the consumer at or before closing exceed the largest of $451 or 8 percent of the total loan amount. (The $451 figure is adjusted annually by the Federal Reserve Board, and based on changes in the Consumer Price Index.)

The rules primarily affect refinancing and home equity installment loans that also meet the definition of a high-rate or high-fee loan.

The rules do not cover loans to purchase or initially construct your home, reverse mortgages, or home equity lines of credit (similar to revolving credit accounts).

Disclosures Required:  

If your loan meets the above tests, you must receive several disclosures at least three business days before the loan is finalized: 

  • The lender must give you a written notice stating that the loan need not be completed, even though you've signed the loan application and received the required disclosures. You have three business days to decide whether to sign the loan agreement after you receive the special Section 32 disclosures.
  • The notice must warn you that because the lender will have a mortgage on your home, you could lose the residence and any money put into it, if you fail to make payments.
  • The lender must disclose the APR and the regular payment amount (including any balloon payment where the law permits balloon payments, discussed below) for high-rate, high-fee loans. For variable rate loans, the lender must disclose that the rate and monthly payment may increase and state the amount of the maximum monthly payment.

These disclosures are in addition to the other TILA disclosures that you must receive no later than closing of the loan.

Prohibited Practices:   

The following features are banned from high-rate, high-fee loans:

  • All balloon-payments-where the regular payments do not fully pay off the principal balance and a lump sum payment of more than twice the amount of the regular payments is required-for loans with less than five-year terms. There is an exception for bridge loans of less than one year used by consumers to buy or build a home: in that situation, balloon payments are not prohibited.
  • Negative amortization, which involves smaller monthly payments that do not fully pay off the loan and that cause an increase in your total principal debt.
  • Default interest rates higher than pre-default rates.
  • Rebates of interest upon default calculated by any method less favorable than the actuarial method.
  • A repayment schedule that consolidates more than two periodic payments that is to be paid in advance from the proceeds of the loan.
Prohibited Practices (continued):   

The following features are banned from high-rate, high-fee loans:

  • Most prepayment penalties, including refunds of unearned interest calculated by any method less favorable than the actuarial method. The exception is if:
    • The lender verifies that your total monthly debt (including the mortgage) is 50% or less of your monthly income.
    • You get the money to prepay the loan from a source other than the lender or an affiliate lender; and
    • The lender exercises the penalty clause during the first five years following execution of the mortgage.

Creditors also are prohibited from engaging in a pattern or practice of lending based on the collateral value of your property without regard to your ability to repay the loan. In addition, proceeds for home improvement loans must be disbursed either directly to you, jointly to you and the home improvement contractor, or, in some instances, to the escrow agent.

Violations:   

You may have the right to sue a lender for violations of these new requirements. In a successful suit, you may be able to recover statutory and actual damages, court costs, and attorney's fees. In addition, a violation of the new high-rate, high-fee requirements of the TILA may enable you to rescind (or cancel) the loan for up to three years.


Contact Lowell Overton:
Visit Also:



TeamOverton1.com
Media.TeamOverton1.com
TeamOverton1News.com
TeamOverton1Cards.com
REO Socal.com
SoCalReports.com

Previous Overton Factor Articles

Information provided by this website is general and is not a substitute for professional advice. Please consult your investment advisor and/or attorney before entering into any transaction.

Home
| Join RealMega | Community Web Pages | Contact Us | Blog Page
Advertise on RealMega | Terms of Use | Privacy Statement | Spam Policy

RealMega Site Map | RealMega Site Index

© 1999-2006 RealMega.com. All Rights Reserved.
All Other Copyrights Remain The Property Of Their Respective Owners.

The RealMega Network is Proudly Hosted by Mega Hosters Inc.