Which law requires lenders to disclose consumer credit costs related to adjustable rate mortgages?

The correct answer is related to the Truth in Lending Act (TILA), which mandates that lenders provide clear and accessible information regarding the costs associated with consumer credit, specifically for adjustable rate mortgages (ARMs). TILA aims to protect consumers by ensuring they are fully informed about the terms and costs related to loans, which includes the variability of interest rates in ARMs and how that may affect monthly payments over time.

Under TILA, lenders are required to disclose specific information about the loan, including the annual percentage rate (APR), payment schedules, and any potential changes in interest rates and payments throughout the life of the loan. This law empowers consumers to make informed financial decisions by comparing mortgage offers.

In contrast, other options pertain to different aspects of real estate and lending. For example, the Equal Credit Opportunity Act (ECOA) focuses on preventing discrimination in lending practices, while the Real Estate Settlement Procedures Act (RESPA) deals with the disclosure of settlement costs in real estate transactions. Title VIII refers to the Fair Housing Act, which addresses housing discrimination. Each of these laws serves different purposes, highlighting the importance of understanding the context and specifics of consumer protection in real estate and lending.