Check Your Understanding Answers
- What does the Truth in Lending Act require lenders to disclose to buyers?
The true cost of obtaining credit so that borrowers can compare the costs of various lenders
- Who does Regulation Z apply to?
All media including websites, billboards, radio, TV, and direct mailing
- Why was the Community Reinvestment Act passed?
To prevent redlining
- List three warning signs of predatory lending. (Additional correct answers on page 70.)
- Phrases such as “guaranteed approval” and “no income verification”
- Large balloon payments or significant increases in the interest rate after a short period
- Loan fees between 5-7% of the loan amount
