Abstract
The Federal Truth-in-Lending Act (“TILA”) requires that creditors provide borrowers with certain disclosures. The failure to accurately provide borrowers with the required disclosures can subject creditors and assignees to significant liability under TILA. TILA contains several cure provisions that both creditors and assignees of mortgage loans can utilize to avoid liability if certain procedures are followed. This article analyzes the the “self-corrective” and “bona fide error” cure provisions found in Sections 130(b) and 130(c) of TILA, and explains how both creditors and assignees can take advantage of these cures to avoid various types of civil, administrative, and criminal penalties. The use of these cure provisions can enhance the profitability of the origination platforms of mortgage lenders, and capital market groups that transact in mortgage-backed securities. Primary and secondary market participants, including underwriters of residential mortgage-backed security mortgage pools and investors in the secondary market, will find this article extremely relevant to their businesses. <b>TOPICS:</b>Information providers/credit ratings, MBS and residential mortgage loans
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