If you are planning to take out a home loan for purchasing your dream house, then you ought to know about the major mortgage laws. Educate yourself on the major laws to understand the mortgage lending process. The mortgage laws have been introduced by the government to guard the borrowers from the exploitation of the mortgage lenders, and to regulate the practices of banks and financial organizations.

Mortgage laws

Here are some major mortgage laws that you should be aware of:

1. Truth in Lending Act: This mortgage law was passed in 1968. This law is a part of the Consumer Credit Protection Act. This law categorically specifies that the mortgage borrowers have the right to get some written disclosures from the lenders. These disclosures include finance charge, financed amount, total payments, total sales price and annual percentage rate. The Act also speaks about advertising criteria for lenders and the rescission rights for the borrowers.

2. Equal Credit Opportunity Act: This law was enacted in 1975. As per this Act, the lenders can’t do credit discrimination on the ground of gender, religion, caste, age, nationality, race and marital status.

3. Home Mortgage Disclosure Act: This law was passed in 1975. As per this Act, the mortgage lenders are required to provide details on granted and rejected home loans.

4. Community Reinvestment Act: Passed in 1977, this mortgage law aims to urge the financial organizations to fulfill the credit requirements of the neighborhoods in which they serve.

5. Real Estate Settlement Procedures Act : This mortgage law was enacted in 1974. This particular mortgage law covers various types of loans such as purchase loans, home improvement loans, refinance loans, assumptions and equity lines of credit for 1-4 unit homes. The law spells out that the lenders are required to give some disclosures to the mortgage borrowers at the loan application time, prior to closing, at the time of closing and after closing. The law also forbids the practices that can increase the closing costs of the loan.

Finally, New Homeowner’s Protection Act or the PMI Act specifies the rules and regulations concerning the cancellation of the private mortgage insurance. This law is applicable to only those mortgage laws that have been secured on or after 29th July, 1999.