Truth in Lending

The History:  The Consumer Credit Protection Act, more commonly known as the Truth-in-Lending Act, went into effect in 1968. The law is intended to protect borrowers from predatory lending by requiring lenders to fully disclose all costs associated with securing a mortgage loan.

Prior to the implementation of the act, borrowers routinely were paying considerably more than what had been initially advertised or agreed upon in the beginning stages of the loan process. Now, lenders must provide the potential borrower with an approximate cost, not only in dollars but percentage terms within a specified period of time prior to the application. Then, the exact costs and interest rate must be provided to the borrower, according to the law, at least, one full business day prior to the closing, in a document known as The Uniform Settlement Statement. This document provides relevant data clearly and consistently laid out, regarding finance charges, the total amount of each payment, the number of monthly payments over the life of the loan, as well as other pertinent financial information to help the borrower understand and manage the loan.

Also notable, a borrower who has applied for an equity loan, refinance of primary home, or a second mortgage has the option to back out of the loan agreement, if he or she does so within three days. However, the rescission option is not applicable for a single home loan, to initially purchase a home.¹

Truth in Lending Today:

The Truth in Lending/ TIL discloses information to address the following items; calculate the Annual Percentage Rate, show the prepaid charges, show the overall finance charge of the mortgage, the amount financed, total payments, a payment schedule, discloses if there is a prepayment penalty, and discusses how the late fee will work.

The Truth in Lending is to give a fair and accurate cost by taking the interest rate, loan term, mortgage insurance, if any, closing costs and producing the Annual Percentage Rate which is the rate to compare all other mortgages to. By taking all these items into consideration, this will produce an average rate assuming all of these factors; otherwise known as the Annual Percentage Rate or APR.  This rate will allow you to shop and compare to all other mortgage offers and programs.

There have been some recent minor changes in the law regarding Truth in Lending known as the Mortgage Disclosure Improvement Act (MDIA).  And these guidelines are continuing to change often.  To find out more details about what the law is saying today please go to this link  http://www.dfi.wa.gov/cs/pdf/mdia-notice.pdf   If you still have questions, please contact me at bill@billnickerson.com

¹ http://www.mortgage101.com/article/what-is-truth-in-lending-act

Featured Open House Recipe

Occasionally I am asked by a realtor to sponsor a luncheon for their open house.  I have found that by making something special for the luncheon, the realtors slow down and take a moment to truly enjoy the lunch which tends to promote more conversation about the home they are viewing.  I greatly enjoy these interactions that occur.  This last week for the luncheon I made Quiche.  Check out my recipe below…Hope you enjoy it!

Bill’s Quiche

Prep time: 30-45 minutes         Serves:  6-8

Ingredients:

1/3 lb. Prosciutto (from any deli ask for ¼ inch thick slice), diced

½ Onion(I prefer Vidalia), diced

5 Eggs, large

1 ½ C Whole milk (Healthy version)

2 ½ oz. Extra Sharp Cheddar, shredded

2 ½ oz. Mild cheddar, shredded

¼ C Parmesan cheese, grated

¼ C Marsala wine

½ C Butter, plus an extra ¼ inch slice

One 9-inch pie crust

In advance:                                                                                                                Preheat oven to 350 degrees.                                                                                        Have all ingredients ready on counter.  Shred cheeses, dice meat and onion.      Remove pie crust from package and drape the crust over a 9 inch pie plate.

In medium sized saute pan, melt butter over medium heat.  Add diced onions; turning occasionally.  Once onions begin to brown; add diced prosciutto and continue browning about 2 to 4 minutes.  Then add Marsala wine and ¼ inch slice butter.  Lower heat and simmer; slowly cook until all Marsala wine has been cooked off (so liquid is mostly gone).

While the onions and prosciutto are cooking, prepare the pie plate by shaping the crust to fit into the plate.  Cover the bottom of the pie plate with extra sharp cheese only.  In a separate dish, whisk 5 eggs until blended;  then pour into whole milk. (I use a large 4 cup measuring cup to save on dishes).

Drain prosciutto and onions in a colander; then spread evenly over the cheese in the pie crust. Pour the egg/milk mixture over prosciutto and onions.  Spread the mild shredded cheddar evenly over the egg/milk mixture.  Sprinkle Parmesan cheese over the top.

Place into oven and bake 30 minutes.  Using a thermometer, you want the pie to be at least 175 degrees and for the crust to be slightly brown.  When done remove from oven and allow to cool for about 15 minutes before serving.  Enjoy!