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lender offering adjustable-rate residential mortgage
loans must provide prospective borrowers with a copy
of the most recent Federal Reserve Board publication
which provides information on such loans. It is currently
titled "Consumer Handbook on Adjustable-rate Mortgages."
The publication must be given at the earlier of:
• the request of the prospective borrower; or,
• when the lender first provides information concerning
adjustable-rate mortgages or credit sales, other than
by direct mail advertising.
Federally regulated lenders, and lenders who have adopted
or are subject to federal rules, may achieve compliance
by providing the disclosures at the same time and under
the same circumstances as when the lender makes the
federally required disclosures pursuant to the Truth-in-Lending
Act.
The following definitions apply:
• Adjustable-rate residential mortgage loan means
any loan or credit sale which is primarily for personal,
family, or household purposes; bears interest at a rate
which is subject to change during the term of the loan
(whether predetermined or otherwise); and which is secured
by real property containing one-to-four dwelling units.
• Lender refers to any person, association, corporation,
partnership, or other business entity that makes in
any twelve month period more than l0 loans or credit
sales secured by residential real property of one-to-four
dwelling units.
Any lender who fails to provide the information required
by this law may be enjoined and may be liable for actual
damages, court cost and reasonable attorney’s
fees. Federal Truth-in-Lending disclosures made in connection
with adjustable-rate loans should include the worst
case and best case scenarios.
Title 12 Code of Federal Regulations Part 29 of Chap
I and/or 563 of Chap V; Civil Code Section 1921
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