The Disclosure

• The HMDA requires lenders to provide borrowers refinancing a home loan with specific disclosures. These required disclosures include a good-faith estimate of all fees regarding the refinance and a simplified settlement statement that clearly specifies the terms of the loan. Additionally, the act requires the lender to notify the borrow of a loan denial and provide the borrower with the reason for the denial.
  
  

Good-Faith Estimate

• Lenders have to provide a good-faith estimate that clearly lists all of the fees and costs associated with your refinance loan. The HMDA requires the lender to provide the borrower with the GFE within three days of the date the borrower submits the loan application. The GFE will include any origination fees, processing fees, points, titles charges, appraisal charges and prepaid interest charges. Additionally, the GFE will show the estimated monthly mortgage payment under the terms of the proposed refinance loan.
  
  

Truth in Lending Act

• The Truth in Lending statement is a disclosure that states the full terms of the proposed refinance mortgage loan. The TIL must state the amount of the loan, the repayment term or length of the loan and disclose any potential change to the interest rate on an adjustable rate loan. Additionally, the TIL must specify the annual percentage rate of the loan. The APR is the true cost of the loan expressed as a percentage and includes any interest charges and fees associated with the proposed mortgage loan.
  
  

Equal Opportunity Credit Act

• The Equal Opportunity Credit Act protects the rights of all applicants by ensuring that lenders evaluate loan applications based on the information given in the loan application. Lenders cannot make lending decisions based on race, age, gender or socioeconomic status. The Equal Opportunity Act disclosure informs borrowers about these rights.