Which law regulates the creation of the closing disclosure and loan estimate?

The TILA-RESPA Integrated Disclosure Rule is the law that regulates the creation of the closing disclosure and loan estimate. This rule was established to simplify and improve the transparency of the mortgage process for consumers. It combines the requirements of two key regulations: the Truth-in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).

The loan estimate provides borrowers with important information about the mortgage loan they are applying for, allowing them to understand the costs, terms, and potential risks associated. The closing disclosure, on the other hand, outlines the final terms of the loan and the closing costs a borrower will incur, ensuring that they have a clear understanding before finalizing the transaction.

By integrating these disclosures into one streamlined process, the TILA-RESPA Integrated Disclosure Rule aims to enhance consumer protection, promote informed decision-making, and facilitate a smoother closing process in real estate transactions.