Under which regulation must lenders provide a Closing Disclosure before closing?

The correct answer is TILA, which stands for the Truth in Lending Act. TILA requires that lenders disclose key terms and costs associated with a mortgage transaction to borrowers, ensuring that they are well-informed before they close on a loan. Specifically, under TILA regulations, lenders must provide a Closing Disclosure at least three business days before the closing date of the mortgage. This document includes details about the loan terms, monthly payments, and other closing costs, allowing borrowers to review the information thoroughly and prepare for the transaction.

While RESPA (the Real Estate Settlement Procedures Act) also mandates certain disclosures related to closing costs and settlement services, TILA plays a more direct role regarding the timing and specifics of the Closing Disclosure in the context of loan closing. ECOA (the Equal Credit Opportunity Act) focuses on preventing discrimination in lending practices, and HMDA (the Home Mortgage Disclosure Act) relates to reporting and monitoring lending practices for fair housing laws, neither of which involve the requirement for providing a Closing Disclosure before closing.