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Shop Alternative Loan Providers Truth in Lending

In a recent article on Federal Reserve proposals for amending the Truth in Lending Act (TILA), I commented favorably on a proposal for early disclosures designed to encourage borrowers to shop alternative loan providers. Most of the mandated information that lenders now provide borrowers need not be placed in their hands until days after they have submitted an application, which in most cases is too late to help in shopping. Consumers rarely disengage from a lender once they have submitted an application.

The proposed new disclosures will be required at the point of application. This is a great idea, if it is properly implemented. Proper implementation means that the information lenders must submit at the point of application will help consumers select from among loan providers. Stated somewhat differently, the information must reveal differences between lenders that will cause borrowers to prefer one over another.

Hipotecas Prestamos September 28, 2009 10:31 AM