What is the primary disclosure document in mortgage lending under Regulation Z?

The primary disclosure document in mortgage lending under Regulation Z is the Loan Estimate (LE). This document is designed to provide consumers with clear and concise information about the key features, risks, and costs of the mortgage loan they are considering. By doing so, it allows borrowers to compare different loan offers and make informed decisions prior to closing.

The Loan Estimate must be provided to a borrower within three business days after they submit a loan application, ensuring that they have adequate time to review the terms before making a final commitment. It includes critical details such as the loan amount, interest rate, monthly payment, and estimated closing costs, all of which promote transparency in lending practices.

Other documents mentioned, such as the Truth in Lending Statement, Closing Disclosure, and the APR Statement, serve important functions but come into play at different stages or under specific conditions in the loan process. The Truth in Lending Statement was historically significant but has largely been replaced by the Loan Estimate as a primary disclosure at the application stage. The Closing Disclosure provides a final summary of the loan terms and closing costs but is presented at the end of the transaction. The APR Statement, while vital for understanding the overall cost of borrowing, is usually included as part of the disclosure documents rather than standing alone as the