Federal mortgage lending laws: RESPA, Truth in Lending, and equal credit

Three federal checkpoints

Federal mortgage protections apply in Florida: RESPA addresses settlement services, Truth in Lending addresses credit information, and ECOA addresses fair credit decisions. Coverage and exceptions depend on the transaction.

Settlement practices: RESPA

Under 12 U.S.C. § 2607, giving or accepting something of value under an agreement to refer settlement service business involving a federally related mortgage loan is prohibited. Splitting a settlement charge without actual services is also prohibited. Distinguish payment for work from payment for referrals.

A seller cannot condition a covered sale on the buyer purchasing title insurance from a particular company. The seller's statutory liability is three times the title insurance charges (12 U.S.C. § 2608). The mortgage escrow cushion is generally limited to one sixth of estimated annual charges, or two months; this is not a cap on the entire settlement deposit, and deficiencies can require additional deposits (12 U.S.C. § 2609). Home buying booklets explain settlement costs and mortgage choices (12 U.S.C. § 2604).

Credit costs: Truth in Lending

The amount financed is credit available for the consumer's use; the finance charge is the dollar cost of credit (15 U.S.C. § 1638). The annual percentage rate includes certain credit charges beyond interest and differs from the note rate.

For covered integrated-disclosure loans, deliver or mail the Loan Estimate within three business days after application; the borrower must receive the Closing Disclosure at least three business days before consummation. The Loan Estimate supports shopping; the Closing Disclosure explains final terms and costs.

Certain nonpurchase loans secured by a principal dwelling have a three-business-day rescission period running from the latest of consummation, required material disclosures, and rescission notice delivery. This rescission period is distinct from disclosure waiting periods. Home purchase mortgages are exempt from that rescission right under the residential mortgage transaction exemption (15 U.S.C. § 1635).

Credit decisions: ECOA

Under 15 U.S.C. § 1691, prohibited bases include race, color, religion, national origin, sex, marital status, age when legally able to contract, public assistance income, and good faith exercise of consumer credit rights. Lawful repayment analysis remains permitted. Generally, notify the applicant of action within thirty days of a completed application. Adverse action entitles the applicant to specific reasons. First lien dwelling applicants receive written appraisal and valuation copies without an additional copying charge, including when the loan is denied.

These are federal protections, not a distinct Florida variation.