§ 617.7130. What initial disclosures must a qualified lender make to a borrower?
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/us/cfr/t12/s§ 617.7130·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Required disclosures—in general. A qualified lender must disclose in writing:
(1)The interest rate on the loan;
(2)The effective interest rate of the loan;
(3)The amount of stock or participation certificates that a borrower is required to purchase in connection with the loan and included in the calculation of the effective interest rate of the loan;
(4)All loan origination charges included in the effective interest rate;
(5)That stock or participation certificates that borrowers are required to purchase are at risk and may only be retired at the discretion of the board of the institution; and
(6)The various types of loan options available to borrowers, with an explanation of the terms and borrower rights that apply to each type of loan.
(b)Adjustable rate loans. A qualified lender must provide the following information for adjustable rate loans in addition to the requirements of paragraph
(a)of this section:
(1)The circumstances under which the rate can be adjusted;
(2)How much the rate can be adjusted at any one time and how much the rate can be adjusted during the term of the loan;
(3)How often the rate can be adjusted;
(4)Any limitations on the amount or frequency of adjustments;
(5)The specific factors that the qualified lender may take into account in making adjustments to the interest rate on the loan; and
(6)If the borrower's interest rate is directly tied to a widely publicized external index:
(i)How and where the borrower may obtain information on changes to the index; and
(ii)When the qualified lender will provide written notice of changes to the borrower's interest rate. [69 FR 16459, Mar. 30, 2004, , as amended at 74 FR 67972, Dec. 22, 2009]