Where subprime loans fail to meet Truth-in-Lending mortgage disclosure requirements?
Lenders are expected to supply some detailed information to borrowers, regarding key aspects of their mortgage loans. For example, the effective interest rate after ARM rate reset, some very loan specific terms and the overall Interest Cost (IC) of the loan. This is where many subprime mortgages actually fail to comply with TILA – the major federal consumer protection law. They didn’t explicitly state the maximum monthly mortgage payment, or that rate and payment can increase significantly over the life of the loan. Since subprime mortgage lawsuits are generally based on insufficiently accurate loan papers with basic non-compliant errors – were these made on purpose or merely went unnoticed?
