Finance

A Utah lender who violates the Truth in Lending Act (TILA) may be subject to:

AOnly a warning letter from the Federal Reserve

BCivil liability to the borrower including actual damages, statutory damages, and attorney fees✓ Correct

COnly criminal prosecution

DLoss of their Utah business license only

Explanation

TILA violations can expose lenders to civil liability including actual damages, statutory damages (up to $4,000 in individual actions), and attorney fees. Rescission rights may also be extended.

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Key Terms to Know

Debt-to-Income Ratio (DTI)

A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.

Private Mortgage Insurance (PMI)

Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.

Pre-Approval

A lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.

Deed of Trust

A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.