Oklahoma Adopts Provisions Regarding Truth in Lending Rules
by: Lee Greenberg
The state of Oklahoma recently adopted several provisions that incorporate federal changes to Regulation Z for purposes of maintaining Oklahoma’s exemption from federal enforcement of the consumer credit disclosure provisions of the Truth in Lending Act and Regulation Z. The legislation implements enhanced mortgage disclosure requirements which were incorporated into the Uniform Consumer Credit Code by House Bill 2742. The law does not apply to extensions of credit in which the amount of credit extended exceeds $50,000, unless the extension of credit is secured by real or personal property to be used as the consumer’s principal dwelling or for a private education loan.
The new disclosure provisions become effective on July 1, 2013 and include the following:
- If required disclosures are given before the date of consummation of a transaction and a subsequent event makes them inaccurate, creditors are required to disclose before consummation any changed term (unless the term was based on an estimate and was labeled as such) and all changed terms (if the annual percentage rate at the time of consummation varies from the annual percentage rate disclosed earlier by more than 1/8 of 1 percentage point in a regular transaction, or more than ΒΌ of 1 percentage point in an irregular transaction).
- In regards to mortgage transactions subject to the Real Estate Settlement Procedures Act that are secured by the consumer’s dwelling, other than a home equity line of credit or mortgage transaction that is secured by a consumer’s interest in a timeshare plan, creditors are required to make good faith estimates of required disclosures and must deliver or place them in the mail not later than the third business day after the creditor receives the consumer’s written application. Furthermore, creditors are required to deliver or place good faith estimates in the mail not later than the seventh business day before consummation of the transaction. Also, if the disclosed annual percentage rate becomes inaccurate, creditors must provide corrected disclosures with all changed terms. The consumer must receive the corrected disclosures no later than three business days before consummation. If the corrected disclosures are mailed to the consumer or delivered to the consumer by means other than delivery in person, the consumer is deemed to have received the corrected disclosures three business days after they are mailed or delivered. If a consumer determines that the extension of credit is needed to meet a personal financial emergency, the consumer may modify or waive the seven-business-day waiting period or the three-business-day waiting period, after receiving the required disclosures.
- In regards to mortgage transfers, any person that becomes the owner of an existing mortgage loan by acquiring legal title to the debt obligation, whether through a purchase, assignment, or other transfer, and who acquires more than one mortgage loan in any twelve-month period, is required to mail or deliver a disclosure to the consumer on or before the 30th calendar day following the date of transfer. The disclosure must identify the loan that was acquired or transferred and state the name, address and telephone number of the owner, the date of transfer, the name, address and telephone number of an agent or party authorized to receive notice of the right to rescind and resolve issues concerning the consumer’s payment on the loan, and where transfer of ownership of the debt is or may be recorded in public records, or that the transfer has not been recorded in public records at the time the disclosure is provided.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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