Loan Officer Practice Exam

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Prepare for the Loan Officer Exam. Study with quizzes and multiple choice questions, each with hints and detailed explanations. Start your journey today!

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What must lenders disclose in the loan estimate to comply with TILA?

Borrower’s social security number
Amount of interest included in the loan
Loan and closing costs
Borrower's current income

The correct answer is: Loan and closing costs

Lenders must disclose the loan and closing costs in the loan estimate to comply with the Truth in Lending Act (TILA). This regulation requires lenders to provide borrowers with clear and concise information about the terms and costs associated with the loan. By disclosing loan and closing costs, borrowers can make informed decisions regarding their financial obligations and compare offers from different lenders. This transparency is essential in promoting informed borrowing and protecting consumers from misleading practices. The other options do not fulfill the TILA requirements for disclosure. For instance, while a borrower’s social security number and current income are significant for the lender's assessment of risk and qualification, they are not mandated disclosures under TILA. Similarly, disclosing the amount of interest included in the loan isn't specified within the TILA framework, as the key focus is on the overall costs associated with the loan. This emphasis on total costs helps borrowers to evaluate the entire financial impact of the loan effectively.