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Federal Reserve Proposes Truth in Lending Changes

July 24th, 2009

One reason so many homeowners ended up way in over their heads with mortgage loans as the housing market went bust is because they didn’t understand what they were getting into in the first place. In an effort to improve disclosures to consumers about mortgage loans and home-equity lines of credit (HELOC), the Federal Reserve has proposed some significant changes to Regulation Z, or Truth in Lending Act (TILA).

Comparing Mortgages

The proposed changes are aimed at helping consumers compare mortgage products. ”Consumers need the proper tools to determine whether a particular mortgage loan is appropriate for their circumstances,” Federal Reserve Chairman Ben S. Bernanke said in a statement. “It is often said that a home is a family’s most important asset, and it is the Federal Reserve’s responsibility to see that borrowers receive the information they need to protect that asset.” Read the rest of this entry »