Call Today for a Free Consultation
(954) 947-7147
TILA Violations
Banks and lenders must comply with TILA regulations by providing borrowers with essential information, such as the annual percentage rate, monthly payment amount, potential interest rate and payment rate adjustments, and maximum monthly payment. Failure to disclose this information could result in legal action from the borrower. TILA violations can vary from minor omissions to severe predatory lending tactics, like deceiving borrowers about loan terms.
What is the TILA?
Financial institutions are expected to safeguard the rights of their clients when entrusted with their funds. However, this is not always the case.
This is where the Truth in Lending Act, commonly referred to as TILA, comes into play. TILA ensures that borrowers are protected by mandating that banks and other entities provide full disclosures before extending credit. The Act aims to prevent unjust lending practices and applies to a wide range of consumer credit, such as mortgages, credit cards, and home equity loans.
TILA, established in 1968 by Congress and enforced by the U.S. Federal Reserve Board, serves as a crucial federal law that promotes transparency in credit terms for consumers. By enabling individuals to compare credit options effectively, TILA fosters a fair and competitive financial environment, ultimately empowering consumers to make informed decisions regarding credit usage.
What is the Right of Recission?
One crucial aspect of the Truth in Lending Act is the provision of a right of rescission to the borrower. This right allows the borrower a three-day window to reverse the loan agreement without facing any penalties. In cases where it is proven that the required disclosures were not provided at the time of the loan origination, this right can be extended to three years. This extended period enables the borrower to reclaim the down payment, interest payments, and points paid. In some instances, this may render the lender unable to enforce the mortgage. If you suspect that you have experienced a violation of TILA, reach out to Orr Legal promptly for a complimentary consultation to determine the viability of your case.