Most mortgage borrowers don't know their rights until something goes wrong. Understanding your rights before you enter a loan transaction gives you tools to protect yourself and to hold lenders accountable when they don't meet their legal obligations.
Right to a Loan Estimate
Under TILA and RESPA, you have the right to receive a Loan Estimate within three business days of submitting a complete mortgage application. The Loan Estimate must include the interest rate, monthly payment, estimated closing costs, and key loan features. Use this document to compare offers from multiple lenders on an apples-to-apples basis.
Right to a Closing Disclosure
You must receive a Closing Disclosure at least three business days before closing. This document shows the final loan terms and closing costs. You have the right to review it carefully and ask questions. If the Closing Disclosure differs materially from your Loan Estimate on items not subject to allowed tolerance variations, the lender must explain or correct the difference.
Right of Rescission on Refinances
When you refinance your primary residence, you have three business days after closing to cancel the loan without penalty. This right of rescission under TILA is automatic and must be disclosed at closing. Certain material TILA violations can extend this right up to three years. The right of rescission does not apply to purchase money mortgages or to refinances by investment property or rental property owners.
Right to Equal Credit Opportunity
Under the Equal Credit Opportunity Act (ECOA), creditors cannot discriminate against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. If you believe you were denied credit or offered worse terms on the basis of a protected characteristic, you have the right to file a complaint with the CFPB or your state's civil rights agency.
Servicing Rights
Your loan servicer must credit payments promptly, respond to qualified written requests within specific timeframes, provide accurate account statements, and follow proper procedures before initiating foreclosure. RESPA and other regulations govern servicer conduct. If your servicer misapplies payments, improperly assesses fees, or fails to respond to inquiries, those are regulatory violations you can report to the CFPB.
Right to Know Why You Were Denied
If you're denied credit, the lender must provide you with an adverse action notice explaining the reasons for denial and the credit reporting agency whose report was used if a credit report was a factor. This information helps you understand what's affecting your credit and what steps might improve future applications.
Coventry Enterprises LLC helps borrowers understand and exercise their rights. Related: predatory lending laws and Michigan lending regulations.