Which law mandates lenders to disclose the terms of a mortgage loan clearly and conspicuously?

The Truth in Lending Act (TILA) is the law that requires lenders to provide clear and conspicuous disclosures of the terms of a mortgage loan. This legislation aims to promote informed use of credit by requiring disclosure of the annual percentage rate (APR), finance charges, the total amount financed, and the total payment amount required under the loan. This enables borrowers to understand the true cost of borrowing and make informed comparisons between different loan offers.

The clarity and conspicuous nature of the disclosures mandated by TILA is essential, as it helps consumers grasp complex terms and conditions that could affect their financial decisions significantly. By focusing on transparent communication, TILA serves to promote responsibility within the lending industry and protect borrowers from misleading practices.