As a consumer you have the right to be protected. So, it helps to know who and what is on your side.
TILA, or the Truth in Lending Act, was a federal law enacted in 1968. TILA is there to protect you, the consumer, when you borrow money. TILA requires the disclosure of certain credit terms so you are not deceived. There are numerous other parts involved in TILA but this is a very basic definition.
RESPA, or the Real Estate Settlement Procedures Act, was enacted by Congress in 1974. The U.S. Department of Housing and Urban Development (HUD) states, “RESPA ensures that consumers throughout the nation are provided with more helpful information about the cost of the mortgage settlement and protected from unnecessarily high settlement charges caused by certain abusive practices.” RESPA, in layman’s terms, has to do with the rules and regulations that need to be followed by your lender and accompanying parties for a transaction involving a loan.
TILA and RESPA are undergoing some changes this year! According to the Consumer Financial Protection Bureau (CFPB and the entity in charge of mandating the change), “The new Loan Estimate and Closing Disclosure requirements – effective August 1, 2015 – will combine two existing disclosure regimes under TILA and RESPA and make mortgage disclosure easier for consumers to understand and use.”
To find out more about the changes, please check out these great tips and examples directly from the CFPB on their website:
TILA-RESPA Integrated Disclosure rule implementation