Which act requires mortgage loan officers to provide borrowers with the Loan Estimate?

The requirement for mortgage loan officers to provide borrowers with the Loan Estimate comes from the Truth in Lending Act (TILA), which is focused on promoting informed use of consumer credit by requiring disclosures about loan terms and costs. TILA mandates that lenders provide a Loan Estimate to borrowers within three business days of receiving a loan application. This document summarizes key features of the loan, including the estimated closing costs, monthly payments, and other important information, enabling borrowers to compare various loan offers effectively.

This requirement under TILA ensures transparency and helps protect consumers from unexpected costs or terms associated with borrowing. It is designed to improve consumers' understanding of their financing options, thereby fostering more informed decision-making.

Other acts mentioned, such as the Fair Housing Act and the Equal Credit Opportunity Act, focus primarily on prohibiting discrimination in housing and lending practices, while the Real Estate Settlement Procedures Act (RESPA) does address certain disclosures and practices related to settlements but does not specifically mandate the Loan Estimate. This highlights the specific role and intention of TILA in ensuring detailed loan information is readily available to borrowers.