• Learn about the laws associated with mortgage lending to ensure you're being treated fairly.New Home image by Ryan LeBaron from Fotolia.com
  
  The United States Federal Government has passed a series of loan laws intended to provide parity among the mortgage banking and lending industry. These laws, passed by Congress, seek to provide a uniform set of standards so a borrower in one state will not be subjected to different lending practices than a borrower in another state.
  
  Ultimately, the decision to lend money is left up to the banks or lending institutions, but a potential borrower can file a report if they feel these laws were compromised in their case.
  
  

Equal Credit Opportunity Act

• The Equal Credit Opportunity Act (ECOA) states that a lending institution may not base their lending decisions on race, religion, sex, creed, national origin, age, or marital status. If a potential borrower is turned down for a loan, the lending institution must send that borrower a letter within 30 days stating the reason why that borrower was rejected.
  
  The ECOA is meant to place all people who are applying for a mortgage loan (or other types of loans as well) on equal footing.
  
  

Real Estate Settlement Procedures Act

• The Real Estate Settlement Procedures Act states that banks and mortgage lending institutions must provide a "good faith estimate" of the closing costs which will be associated with the mortgage. The purpose of this act is to stop the hidden fees that can be added to closing a mortgage loan.
  
  This can be quite important for first time home-buyers who have not been through the closing process before. Closing costs can range from a few thousand to tens of thousands of dollars depending on the loan product the borrower is using for the purchase of their home.
  
  

Regulation Z

• The Truth in Lending Act has a very important regulation written within the language of the act. Regulation Z states that the bank or lending institution must provide the annual percentage rate (APR) associated with the loan. The APR is the actual amount of interest you will pay for the loan.
  
  For instance, if a mortgage applicant is told their interest rate is 5 percent, the disclosure of the APR will inform them that once closing costs are accounted for, the actual APR may be 5.2 percent depending on the type of mortgage loan they are securing.