Mortgage Borrowers' Rights
A home mortgage most likely will be the largest and most important loan you get during your lifetime, one you will probably be paying off for as long as 30 years. As a result, it pays to take your time when going through the process to make sure you understand what you are signing. Part of this due diligence is getting to know your rights with respect to mortgages.
While loan servicing and mortgage lending for homeownership is locally regulated under state law, the federal government, through the Consumer Financial Protection Bureau (CFPB), provides additional information regarding creditors, loan modification, mortgage insurance, foreclosure sales, and other matters concerning home loan payments.
For related articles and resources, see FindLaw's Borrower's Rights and Qualifying for a Mortgage sections.
Consumer Protection Laws for Mortgages
The Real Estate Settlement Procedures Act (RESPA) is a law protecting consumers from abuses during the residential real estate purchase and loan process by requiring mortgage loan lenders and mortgage servicing companies to disclose all settlement costs, practices, and relationships. As a borrower, your homeowners rights can help you to avoid foreclosure or foreclosure proceedings, keep steady on your monthly payments (and eventual full repayment), and understand the federal law protections governing the terms of the loan.
Similarly, the Truth in Lending Act of 1968 (TILA) is a piece of federal legislation designed to provide more transparency for mortgage borrowers who use credit, making it easier for the average consumer to compare loans and refinancing opportunities before choosing between mortgage lenders. Among other provisions, the law requires disclosure about the actual cost of a consumer credit transaction by providing the terms of a loan, prepayment conditions, interest rates, due dates, and other relevant information in plain language.
The following information is a list of borrower's rights per HUD's booklet on Shopping for Your Home Loan:
- You have the RIGHT to shop for the best loan for you and compare the charges of different mortgage brokers and lenders.
- You have the RIGHT to be informed about the total cost of your loan including the interest rate, points and other fees.
- You have the RIGHT to ask for a Good Faith Estimate of all loan and settlement charges before you agree to the loan and pay any fees.
- You have the RIGHT to know what fees are not refundable if you decide to cancel the loan agreement.
- You have the RIGHT to ask your mortgage broker to explain exactly what the mortgage broker will do for you.
- You have the RIGHT to know how much the mortgage broker is getting paid by you and the lender for your loan.
- You have the RIGHT to ask questions about charges and loan terms that you do not understand.
- You have the RIGHT to a credit decision that is not based on your race, color, religion, national origin, sex, marital status, age, or whether any income is from public assistance.
- You have the RIGHT to know the reason if your loan was turned down.
- You have the RIGHT to ask for the HUD settlement costs booklet
Need an Attorney?
Between staying up to date on your mortgage payments, building home equity, maintaining a healthy credit report, and paying your mortgage insurance premiums, you may find an array of challenges to overcome as a homeowner. If you have additional questions about your rights as a borrower, seek the contact information and telephone number of a real estate attorney in your area.
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.
Contact a real estate attorney to help you navigate mortgages or home equity loans.