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Regulation Z: There For Your Protection

Tim Worstall
LoanBiz Columnist

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Regulation Z is the reason for all the small print: that's why it's important. When you see advertising from mortgage companies explaining different loan options, there will always be a mass of small print at the bottom of the ad (or if on the radio or TV, the last few seconds will be someone speaking very very fast).

The reason for this is Regulation Z, a requirement placed upon the mortgage companies that they must tell you the details about the costs of your mortgage. It can sound almost comical, the way the announcer rushes to get everything into a few seconds of time, but it isn't funny. Regulation Z is there for your protection and it's important that you understand what the mortgage companies are telling you about your mortgage.

Regulation Z is about disclosure. The aim of Regulation Z (even if it is a little more bureaucratic than many would like) is to make sure that the mortgage companies disclose to you all of the charges and terms applicable to your mortgage. You are informed about the closing costs, warned that if you do not keep up the payments you can lose your house, and so on. It's a cliché that the devil is in the details, and with complicated contracts this is exactly true, that the small print of the contract makes all the difference. Thus Regulation Z, forces the mortgage lenders to disclose the costs, risks and details of your mortgage. It is extremely important that you read and understand these details.

Source
Bankers Online

About the Author
Tim Worstall has a degree in finance and accountancy and writes extensively on matters economic and financial.

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