What is required in the disclosure documents before a residential mortgage can be funded?

In order for a residential mortgage to be funded, it is essential to provide the Truth in Lending Disclosure Agreement and the Good Faith Estimate. The Truth in Lending Act (TILA) mandates that borrowers receive a clear and comprehensive disclosure of the terms and costs associated with the loan. This includes the annual percentage rate (APR), finance charges, and the total amount financed, all of which help borrowers understand the true cost of their mortgage.

The Good Faith Estimate (GFE) is another crucial requirement that provides a detailed estimate of the closing costs and other fees associated with securing the loan. It allows borrowers to understand and anticipate the financial obligations they will incur, ensuring transparency in the lending process.

These documents serve to protect consumers by ensuring they are well-informed before committing to a loan, which is a foundational principle in safe and responsible lending practices. Without these disclosures, the lender would not meet regulatory requirements, and the funding process could not proceed appropriately.