Consumer Protection Laws

Consumer protection laws ensure that you act in the best interest of your clients. They prohibit deceptive practices, require clear disclosure of loan terms and conditions, and protect consumers from unfair lending and debt collection practices.

TILA requires lenders, including mortgage brokers, to provide consumers with loan cost information before they agree to a mortgage. This includes disclosing annual percentage rate (APR), term of the loan, and total costs to borrower.

RESPA requires that you provide borrowers with detailed information about their proposed real estate transaction including costs associated with closing or settlement services. It also prohibits kickbacks or referral fees among service providers related to a real estate transaction.

The Fair Housing Act makes it unlawful for any lender, including mortgage brokers, to discriminate against applicants on basis of race, color, religion, sex, national origin, disability or familial status. You must offer equal treatment and opportunity for all potential customers seeking home loans.

The Dodd-Frank act established rules for how brokers can be compensated; mainly preventing them from steering borrowers towards higher-cost mortgages. It also created Consumer Financial Protection Bureau which oversees regulation of residential mortgages industry and enforces anti-discrimination laws among other duties.