The Home Equity Application Disclosure is required by Regulation Z (lines) and Real Estate Settlement Procedures Act (RESPA - loans) and provides applicants with the following:
- Ability to compare the cost of a cash vs. credit transaction
- Difference in the cost of credit among different lenders
The disclosure is required when the loan requested is one of the following:
- Consumer purpose
- Secured by applicant's primary residence
- Secured by applicant's secondary residence
The Home Equity Application Disclosure is included with the Home Equity Line of Credit Application Packet.
Consequences
- Civil fine up to $2,000 per individual case
- $500,000 or 1% of bank’s net worth in a class action situation
- Loan is rescindable for up to 3 years
- Criminal fine up to $5,000
- Up to 1 year in jail
- Both a $5,000 fine and up to 1 year in jail