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Disclosures |
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Disclosures Related to Financing Disclosure #30: Right to Cancel 1. Purpose: To disclose certain circumstances that would allow you to cancel the transaction. Federal law gives you that option when you home is being mortgaged. It is important you clearly understand the time frame involvement (three days) and which events starts the clock running. 2. Whom does it protect? The lender and the title company. 3. What rights do you give up? You lose the right to cancel except under circumstances disclosed. Your signature states that you understand the terms. Disclosure #32: Prepayment Penalty 1. Purpose: To disclose that you will be charged extra money if you decide to pay the loan off earlier than the original term you agreed to. The amount of the prepayment penalty is disclosed as a (%) percentage so the impact of the dollar amount is less apparent. 2. Whom does it protect? The lender and broker. 3. What rights do you give up? You have no basis later to claim you were unaware that you would have to pay the penalty if you sold or refinanced the house. Disclosure #33: Serving Disclosure Statement 1. Purpose: To cover details related to having your loan transferred to a new lender. It also discloses the percentage of loans your initial lender typically transfers at or after closing. 2. Whom does it protect? The lender. 3. What rights do you give up? You cannot later claim you were unaware of the likelihood you loan would be transferred. Disclosure #34: Notice of Assignment Sale or Transfer of Servicing Rights 1. Purpose: To notify the buyer that the loan will be serviced and payments made to a lender other than the lender who started the loan process. 2. Whom does it protect? The lender. 3. What rights do you give up? The buyer cannot later claim they did not know they had a different lender.
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