TILA, servicing statement and other mortgage disclosures: Just the basics
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Here is a list of disclosures (besides the Good Faith Estimate) that your lender must provide to you within three business days of applying for a loan.
Truth in Lending Act statement, or TILA
The federal Truth in Lending Act requires lenders to disclose in writing the terms and conditions of a mortgage, including the annual percentage rate, or APR, and other fees and charges.
Unfortunately, lenders may lawfully exclude certain fees, including property appraisal fees, title search and insurance fees, notary and some recording fees and credit report and flood certification fees, leaving homebuyers without an apples-to-apples comparison of loan costs.
Ask your lender to break down your TILA statement for you. If the information changes, the lender is obligated to provide you with an updated form at or before closing.
Federal law requires your lender to disclose to you whether it believes someone else will eventually be your mortgage servicer — that is, collect payments, handle disputes, send out escrow statements and perform other functions after a loan closes.
Affiliated business arrangement disclosure
In addition to these federally required forms, if you apply for a loan from a mortgage company operated by a builder or real estate agent, you should receive an affiliated business arrangement disclosure at the time the builder or agent refers you to that company. This form simply states that you are not required to use the services of the affiliated company and are free to shop for a mortgage elsewhere.
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