Applying for a Real Estate Loan

• Download and print all application documents• Refer to the application cover letter or brochure for specific instructions• Once all application pages have been completed, signed and dated and all corresponding

documentation has been collected, your Real Estate Loan Application can be dropped off at any FTWCCU office or mailed to the address listed below

• Should you have any questions, you can contact the Real Estate Department directly at 817 835-5028 or 817 835-5020

Fort Worth Community Credit Union ATTN: Real Estate Department

P.O. Box 210848 Bedford, TX 76095-7848

FTWCCU Office Locations

Headquarters Office 1905 Forest Ridge Dr

Bedford, TX 76021

Downtown Office 819 Taylor St Room 7A23

Fort Worth, TX 76102

North Arlington Office 333 S. Bowen Rd

Arlington, TX 76013

South Arlington Office 2327 W. Pleasant Ridge Rd

Arlington, TX 76015

Wedgwood Office 6720 S. Hulen St

Fort Worth, TX 76133

North Fort Worth Office 2601 Meacham Blvd

Fort Worth, TX 76137

Meadowbrook Office 6454 Brentwood Stair Rd

Fort Worth, TX 76112

Altamesa Office 3616 Altamesa Suite 100

Fort Worth, TX 76133

North Richland Hills Office 8524 Davis Blvd

North Richland Hills, TX 76182

Weatherford Office 1911 S. Main St

Weatherford, TX 76086

Burleson Office 1456 Southwest Wilshire Blvd

Burleson, TX 76028

Flower Mound Office 1900 Long Prairie Rd #140 Flower Mound, TX 75022

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FTWCCU Office Locations

Headquarters Office1905 Forest Ridge Dr

Bedford, TX 76021

South Arlington Office2327 W. Pleasant Ridge Rd.

Arlington, TX 76015

Weatherford Office1911 S Main St

Weatherford, Texas 76086

North Richland Hills Office8524 Davis Blvd

North Richland Hills, Tx 76182

Downtown Office819 Taylor St. Rm. 7A23

Fort Worth, TX 76102

Wedgwood Office6720 S. Hulen

Fort Worth, TX 76133

Burleson Office1456 SW Wilshire Blvd

Burleson, Tx 76028

North Tarrant Office3501 North Tarrant Pkwy Fort Worth, TX 76244

North Arlington Office333 S. Bowen Rd.

Arlington, TX 76013

Meadowbrook Office6454 Brentwood Stair Rd. Fort Worth, Texas 76112

Flower Mound Office 3548 Long Prairie Rd.

Flower Mound, Tx 75022

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Home equity line of credit

8/15

member information center(817) 835-5000 Local (817) 318-4900 Metro

(800) 817-8234 Toll-freeEmail: ftwccu@ftwccu.org

24 Hour “Art” Audio Response Phone Line

(817) 835-5050 Local (817) 318-4901 Metro

(800) 817-8235 Toll-free

ftWccu mailing AddressP. O. Box 210848

Bedford, Texas 76095-7848

Web Site / Home Banking information: www.ftwccu.org

to locate free Atm’svisit www.ftwccu.org

Headquarters office 1905 Forest Ridge Dr.Bedford, Texas 76021

downtown office819 Taylor St. Rm. 7A23Fort Worth, Texas 76102

north Arlington office333 S. Bowen Rd.Arlington, Texas 76013

South Arlington office2327 W. Pleasant Ridge Rd.Arlington, Texas 76015

Wedgwood office6720 S. Hulen StreetFort Worth, Texas 76133

meadowbrook office 6454 Brentwood Stair Rd.Fort Worth, Texas 76112

Weatherford office 1911 S. Main St.Weatherford, Texas 76086

Burleson office 1456 Southwest Wilshire BlvdBurleson, Texas 76028

flower mound office 1900 Long Prairie Rd #140Flower Mound, Texas 75022

north richland Hills office8524 Davis Blvd.North Richland Hills, Texas 76182

north tarrant office3501 N Tarrant PkwyFort Worth, Texas 76244

Your savings federally insured to at least $250,000and backed by the full faith and credit of the United States Government

National Credit Union Administration, a U.S. Government Agency

NCUAFederally insured by the NCUA

What is a HELOC loan?Texas homeowners have the opportunity to access the equity in their home with a Home Equity Line of Credit (HELOC).

A HELOC loan enables you to use and re-use your available line of credit as often as you need without having to reapply.

FTWCCU’s variable rate HELOC loans are available on your primary home located within 100 miles of Tarrant County and the interest may be tax deductible.* You can borrow up to 80% of the home’s fair market value. However, the total of all loans against the property may not exceed 80% of the home’s fair market value, maximum of $300,000.00.

We make it easy for you to access the amount you need, when you need it. Simply, visit any FTWCCU office to “draw” from your available credit (minimum $4,000). You’ll pay “interest only” during your 10 year “draw” period. Once the “draw” period ends, we’ll extend yourpayments out over another 10 years.

HELOC’s are great for ongoing expenses such as: Home improvements Educational or medical expenses Bill consolidation A new vehicle Weddings or new baby expenses

How can I get started?Enjoy one of our three convenient ways to start your application today.

Visit www.ftwccu.org to submit your online application Pick up an application at any FTWCCU office Give us a call at (817) 835-5000 or (800) 817-8234

Complete and return the application to our Mortgage Lending Department at:

FTWCCUAttn: Mortgage Lending

PO Box 210848Bedford, Texas 76095-7848

How much can I borrow?The line of credit may not exceed 80% of the fair market value. In addition, all liens may not exceed 80% of the fair market value of the home.

Copies You’ll Need Current Homeowner’s Insurance Policy Recent County Tax Appraisal or State Certified Appraisal Deed of Trust or Title Policy Current mortgage information (name & address, loan number, current balance) Recent pay stubs – If self employed, please submit the last two years tax returns

What are the costs, rates and terms?The variable annual percentage rate (“APR”) is based on the Prime Rate published in the Wall Street Journal, rounded up to the next .25%. The rate is determined by the applicant’s creditworthiness and each loan is subject to credit approval. An increase in the Index will result in higher payments. A decrease will have the opposite effect. The APR will never exceed 18%. The draw period is for a term of ten years. During this time, the minimum required payments will be the amount of interest due. You will be billed each month on your monthly statement. At the end of ten years, you will begin the repayment period, which will be for a term of ten years. At that time, you will begin making principal and interest payments so that the loan will be paid by the maturity date.

* Consult a tax advisor regarding the deductibility of interest.

Note: Maximum line of credit when added to all other loans secured by the property cannot exceed 80% of appraised value of the property. Maximum line of credit cannot exceed 80% of appraised value of the property. FTWCCU must receive a valid first or second lien under Article XVI, Section 50(a)(6) of the Texas Constitution on a primary residence occupied by the borrower. Property insurance required including flood insurance where applicable. Offer does not include manufactured homes, town homes, or condos. Minimum draw is $4,000.00. Additional fees may range from $150.00 to $3,500.00 for loan amounts greater than $100,000.00. A processing fee will be charged on all approved loans.

HOME EQUITY LINE OF CREDIT

6/19

.

Member Information Center(817) 835-5000 Local (817) 318-4900 Metro

(800) 817-8234 Toll-freeEmail: ftwccu@ftwccu.org

24 Hour “ART” Audio Response Phone Line

(817) 835-5050 Local (817) 318-4901 Metro

(800) 817-8235 Toll-free

FTWCCU Mailing AddressP. O. Box 210848

Bedford, Texas 76095-7848

Web Site / Home Banking Information: www.ftwccu.org

To locate FREE ATM’svisit www.ftwccu.org

Headquarters Office 1905 Forest Ridge Dr.Bedford, Texas 76021

Downtown Office819 Taylor St. Rm. 7A23Fort Worth, Texas 76102

North Arlington Office333 S. Bowen Rd.Arlington, Texas 76013

South Arlington Office2327 W. Pleasant Ridge Rd.Arlington, Texas 76015

Wedgwood Office6720 S. Hulen StreetFort Worth, Texas 76133

Meadowbrook Office 6454 Brentwood Stair Rd.Fort Worth, Texas 76112

Weatherford Office 1911 S. Main St.Weatherford, Texas 76086

Burleson Office 1456 Southwest Wilshire BlvdBurleson, Texas 76028

Flower Mound Office 3548 Long Prairie Rd.Flower Mound, Texas 75022

North Richland Hills Office8524 Davis Blvd.North Richland Hills, Texas 76182

North Tarrant Office3501 N Tarrant PkwyFort Worth, Texas 76244

Your savings federally insured to at least $250,000and backed by the full faith and credit of the United States Government

National Credit Union Administration, a U.S. Government Agency

NCUA

Federally insured by the NCUA

AUTHORIZATION TO RELEASE INFORMATION

To Whom It May Concern:

1. I/We have applied for a loan from Fort Worth Community Credit Union. As part of the application process, FTWCCU may need to verify information contained in my/our loan application and in any other documents required in connection with this loan, either before the loan is closed or as part of its quality control program.

2. I/We authorize you to provide FTWCCU any and all information and documentation that they may request. Such information includes, but is not limited to, employment history and income, bank and similar account balances; credit history; loan payoff information and copies of tax returns.

3. A copy of this authorization may be accepted as an original. 4. Your prompt reply to FTWCCU is appreciated.

Borrower Date Social Security Number Borrower Date Social Security Number

Authorization 02/11 Fort Worth Community Credit Union

1905 Forest Ridge Drive Bedford, Texas 76021

817 835-5000

FTWCCU Real Estate Representative

Texas Home Equity Questionnaire The questions below are critical to processing your request for an equity loan under the State law permitting such types of loans and in finding a suitable loan product to meet your needs. You should answer these questions to the best of your ability, notifying your Loan Officer of any questions you may have or clarifi-cation you would like.

• Is your property larger than 10 acres? • Is your property taxed in any manner other than residential?

• Is your property a condominium or townhouse?

• Is your property a duplex, triplex or fourplex?

• Is your current first mortgage classified as a Home Equity Loan? • (Note: If you answered yes to any of the above questions, please stop and

contact our Real Estate Department at 817 835-5028 or 817 835-5020). • Are proceeds from the loan exclusively for Home Improvement?

• Does anyone else have an ownership interest in the property besides you and/or your spouse? (ALL parties must sign ALL documents)

• Are there any liens or debts secured by the property today?

• Is your current loan set up on a bi-weekly payment plan with your lender?

• Have you obtained equity from your home in the last 12 months by refinancing or obtaining a second mortgage?

• Is your property within the limits of an incorporated city?

• Powers of Attorney and mail out closings are unacceptable. Are all parties available and capable of signing all documents?

PLEASE READ THE FOLLOWING REGARDING YOUR REQUEST FOR A HOME EQUITY LOAN

• One equity loan is permitted every 12 months and one equity loan may be secured by a homestead at any given time.

• The applicant and Fort Worth Community Credit Union must agree to the Fair Market Value established during the processing of your request.

• Powers of Attorney are not allowed and all owners and their spouses must sign all documents.

• A 12 day calendar day waiting period is required from the latter of the date we receive; 1. The loan application signed and dated by all applicants. Or; 2. The “Notice Concerning Extension of Credit” signed and dated by all applicants before this loan can be closed. And, • A 3 day business day Right to Cancel period is required after closing before we can

fund the loan and any forthcoming proceeds.

Borrower’s Signature Borrower’s Signature Date Da te

Fort Worth Community Credit Union 1905 Forest Ridge Drive, Bedford, Texas (817) 835-5000

• Is the property titled in the name of a trust?

Circle the applicable answer

YES NO

YES NO

YES NO

YES NO

YES NO

YES NO

YES NO

YES NO

YES NO

YES NO

YES NO

YES NO

YES NO

Disclosure StatementNOTICE TO MORTGAGE LOAN APPLICANTS AND HOME IMPROVEMENT LOANAPPLICANTS: THE RIGHT TO COLLECT YOUR MORTGAGE LOAN PAYMENTSMAY BE TRANSFERRED. FEDERAL LAW GIVES YOU CERTAIN RELATED RIGHTS.SIGN THE ACKNOWLEDGMENT AT THE END OF THIS STATEMENT ONLY IF YOUUNDERSTAND ITS CONTENTS.

Because you are applying for a mortgage loan covered by the Real Estate Settlement Procedures Act(“RESPA”)(12 U.S.C. 2601 et seq.) you have certain rights under that Federal Law. This statement tells you aboutthose rights. It also tells you what the chances are that the servicing rights for this loan may be transferred to adifferent loan servicer. “Servicing” refers to collecting your principal, interest and escrow account payments, if any.If your loan servicer changes, there are certain procedures that must be followed. This statement generallyexplains those procedures.

Transfer Practices and Requirements

If the servicing of your loan is assigned, sold or transferred to a new servicer, you must be given written notice of that transfer.The present loan servicer must send you notice in writing of the assignment, sale or transfer of the servicing not less than 15days before the effective date of the transfer. The new loan servicer must also send you notice within 15 days after theeffective date of the transfer. The present servicer and the new servicer may combine this information in one notice, so longas the notice is sent to you 15 days before the effective date of the transfer. The 15 day period is not applicable if a notice ofprospective transfer is provided to you at settlement. The law allows a delay in the time (not more than 30 days after a transfer)for servicers to notify you under certain limited circumstances, when your servicer is changed abruptly. This exception appliesonly if your servicer is fired for cause, is in bankruptcy proceedings, or is involved in a conservatorship or receivership initiatedby a Federal Agency.

Notices must contain certain information. They must contain the effective date of the transfer of the servicing of your loan tothe new servicer, the name, address and toll-free or collect call telephone number of the new servicer, and toll-free or collectcall telephone numbers of a person or department for both your present servicer and your new servicer to answer yourquestions about the transfer of servicing. During the 60 day period following the effective date of the transfer of the loanservicing, a loan payment received by your old servicer before its due date may not be treated by the new loan servicer as late,and a late fee may not be imposed on you.

Complaint ResolutionSection 6 of RESPA (12 U.S.C. 2605) gives you certain consumer rights, whether or not your loan servicing is transferred. Ifyou send a “qualified written request” to your loan servicer concerning the servicing of your loan, your servicer must provideyou with a written acknowledgment within 20 business days of receipt of your request. A “qualified written request” is a writtencorrespondence, other than notice on a payment coupon or other payment medium supplied by the servicer, which includesyour name and account number, and your reasons for the request. Not later than 60 business days after receiving yourrequest, your servicer must make any appropriate corrections to your account, and must provide you with a written clarificationregarding any dispute. During this 60 day period, your servicer may not provide information to a consumer reporting agencyconcerning any overdue payment related to this 60 day period or this qualified written request. A business day is any day,excluding public holidays (state or federal), Saturdays and Sundays.

Damages and Costs

Section 6 of RESPA also provides for damages and costs for individuals or classes of individuals in circumstances whereservices are shown to have violated the requirements of that Section.

Servicing Transfer Estimates

The next sentence puts forth the best estimate of what will happen to the servicing of your mortgage loan. We may assign, sellor transfer the servicing of your loan sometime while the loan is outstanding, but we have no present intention of doing so. Weare able to service your loan, and we will service your loan at the outset, and for an indeterminate time thereafter.

For all the mortgage loans that we make in the 12 month period after your mortgage is funded, weestimate that the percentage of mortgage loans for which we will transfer servicing is between 0 and25%, and this estimate does include assignments, sales or transfers to any affiliates or subsidiaries.This is only our best estimate and it is not binding. Business conditions or other circumstances mayaffect our future transferring decisions.

In each of the past 3 years, we have transferred between 0 and 25% of the servicing of our loans. Thisinformation includes assignments, sales or transfers to any affiliates or subsidiaries.

ACKNOWLEDGMENT OF MORTGAGE LOAN APPLICANT

I/we have read this disclosure form, and understand its contents, as evidenced by my/our signature(s)below. I/we understand that this acknowledgment is a required part of the mortgage loan application.

Applicant’s Signature Date DateCo-Applicant’s Signature

DisclosureStatement 02/05

1

TX Fraud Notice 1/08

Texas Mortgage Fraud Notice

NOTICE OF PENALTIES FOR MAKING FALSE OR MISLEADING WRITTEN STATEMENT

Warning: Intentionally or knowingly making a materially false or misleading writtenstatement to obtain property credit, including a mortgage loan, is a violation ofSection 32.32, Texas Penal Code, and, depending on the amount of the loan orvalue of the property, is punishable by imprisonment for a term of 2 years to 99years and a fine not to exceed $10,000.

I/we, the undersigned home loan applicant(s), represent that I/we have received,read and understand this notice of penalties for making a materially false ormisleading written statement to obtain a home loan.

I/we represent that all statements and representations contained in my/our writtenhome loan application, including statements or representations regarding my/ouridentity, employment, annual income, and intent to occupy the residential realproperty secured by the home loan, are true and correct as of the date of loanclosing.

This booklet was initially prepared by the Board of Governors of the Federal Reserve System. The

Consumer Financial Protection Bureau (CFPB) has made technical updates to the booklet to

reflect new mortgage rules under Title XIV of the Dodd-Frank Wall Street Reform and

Consumer Protection Act (Dodd-Frank Act). A larger update of this booklet is planned in the

future to reflect other changes under the Dodd-Frank Act and to align with other CFPB

resources and tools for consumers as part of the CFPB’s broader mission to educate consumers.

Consumers are encouraged to visit the CPFB’s website at consumerfinance.gov/owning-a-

home to access interactive tools and resources for mortgage shoppers, which are expected to be

available beginning in 2014.

Table of contents.........................................................................................................3

1. Introduction ...........................................................................................................4

1.1 Home equity plan checklist ...................................................................... 4

2. What is a home equity line of credit? ................................................................. 6

2.1 What should you look for when shopping for a plan? ............................. 7

2.2 Costs of establishing and maintaining a home equity line ...................... 8

2.3 How will you repay your home equity plan? ............................................ 9

2.4 Line of credit vs. traditional second mortgage loans ............................. 10

2.5 What if the lender freezes or reduces your line of credit? ...................... 11

Appendix A: ...............................................................................................................12

Defined terms .................................................................................................. 12

Appendix B: ...............................................................................................................15

More information .............................................................................................15

Appendix C: ...............................................................................................................16

Contact information ........................................................................................ 16

1.If you are in the market for credit, a home equity plan is one of several options that might be

right for you. Before making a decision, however, you should weigh carefully the costs of a home

equity line against the benefits. Shop for the credit terms that best meet your borrowing needs

without posing undue financial risks. And remember, failure to repay the amounts you’ve

borrowed, plus interest, could mean the loss of your home.

1.1 Ask your lender to help you fill out this worksheet.

2.

A home equity line of credit is a form of revolving credit in which your home serves as collateral.

Because a home often is a consumer’s most valuable asset, many homeowners use home equity

credit lines only for major items, such as education, home improvements, or medical bills, and

choose not to use them for day-to-day expenses.

With a home equity line, you will be approved for a specific amount of credit. Many lenders set

the credit limit on a home equity line by taking a percentage (say, 75 percent) of the home’s

appraised value and subtracting from that the balance owed on the existing mortgage. For

example:

In determining your actual credit limit, the lender will also consider your ability to repay the

loan (principal and interest) by looking at your income, debts, and other financial obligations as

well as your credit history.

Many home equity plans set a fixed period during which you can borrow money, such as 10

years. At the end of this “draw period,” you may be allowed to renew the credit line. If your plan

Potential line of credit $35,000

does not allow renewals, you will not be able to borrow additional money once the period has

ended. Some plans may call for payment in full of any outstanding balance at the end of the

period. Others may allow repayment over a fixed period (the “repayment period”), for example,

10 years.

Once approved for a home equity line of credit, you will most likely be able to borrow up to your

credit limit whenever you want. Typically, you will use special checks to draw on your line.

Under some plans, borrowers can use a credit card or other means to draw on the line.

There may be other limitations on how you use the line. Some plans may require you to borrow

a minimum amount each time you draw on the line (for example, $300) or keep a minimum

amount outstanding. Some plans may also require that you take an initial advance when the line

is set up.

2.1

If you decide to apply for a home equity line of credit, look for the plan that best meets your

particular needs. Read the credit agreement carefully, and examine the terms and conditions of

various plans, including the annual percentage rate (APR) and the costs of establishing the plan.

Remember, though, that the APR for a home equity line is based on the interest rate alone and

will not reflect closing costs and other fees and charges, so you’ll need to compare these costs, as

well as the APRs, among lenders.

2.1.1Home equity lines of credit typically involve variable rather than fixed interest rates. The

variable rate must be based on a publicly available index (such as the prime rate published in

some major daily newspapers or a U.S. Treasury bill rate). In such cases, the interest rate you pay

for the line of credit will change, mirroring changes in the value of the index. Most lenders cite

the interest rate you will pay as the value of the index at a particular time, plus a “margin,” such

as 2 percentage points. Because the cost of borrowing is tied directly to the value of the index, it

is important to find out which index is used, how often the value of the index changes, and how

high it has risen in the past. It is also important to note the amount of the margin.

Lenders sometimes offer a temporarily discounted interest rate for home equity lines—an

“introductory” rate that is unusually low for a short period, such as six months.

Variable-rate plans secured by a dwelling must, by law, have a ceiling (or cap) on how much your

interest rate may increase over the life of the plan. Some variable-rate plans limit how much your

payment may increase and how low your interest rate may fall if the index drops.

Some lenders allow you to convert from a variable interest rate to a fixed rate during the life of

the plan, or let you convert all or a portion of your line to a fixed-term installment loan.

2.2

Many of the costs of setting up a home equity line of credit are similar to those you pay when

you get a mortgage. For example:

A fee for a property appraisal to estimate the value of your home;

An application fee, which may not be refunded if you are turned down for credit;

Up-front charges, such as one or more “points” (one point equals 1 percent of the credit

limit); and

Closing costs, including fees for attorneys, title search, mortgage preparation and filing,

property and title insurance, and taxes.

In addition, you may be subject to certain fees during the plan period, such as annual

membership or maintenance fees and a transaction fee every time you draw on the credit line.

You could find yourself paying hundreds of dollars to establish the plan. And if you were to draw

only a small amount against your credit line, those initial charges would substantially increase

the cost of the funds borrowed. On the other hand, because the lender’s risk is lower than for

other forms of credit, as your home serves as collateral, annual percentage rates for home equity

lines are generally lower than rates for other types of credit. The interest you save could offset

the costs of establishing and maintaining the line. Moreover, some lenders waive some or all of

the closing costs.

2.3

Before entering into a plan, consider how you will pay back the money you borrow. Some plans

set a minimum monthly payment that includes a portion of the principal (the amount you

borrow) plus accrued interest. But, unlike with typical installment loan agreements, the portion

of your payment that goes toward principal may not be enough to repay the principal by the end

of the term. Other plans may allow payment of only the interest during the life of the plan, which

means that you pay nothing toward the principal. If you borrow $10,000, you will owe that

amount when the payment plan ends.

Regardless of the minimum required payment on your home equity line, you may choose to pay

more, and many lenders offer a choice of payment options. However, some lenders may require

you to pay special fees or penalties if you choose to pay more, so check with your lender. Many

consumers choose to pay down the principal regularly as they do with other loans. For example,

if you use your line to buy a boat, you may want to pay it off as you would a typical boat loan.

Whatever your payment arrangements during the life of the plan—whether you pay some, a

little, or none of the principal amount of the loan—when the plan ends, you may have to pay the

entire balance owed, all at once. You must be prepared to make this “balloon payment” by

refinancing it with the lender, by obtaining a loan from another lender, or by some other means.

If you are unable to make the balloon payment, you could lose your home.

If your plan has a variable interest rate, your monthly payments may change. Assume, for

example, that you borrow $10,000 under a plan that calls for interest-only payments. At a 10

percent interest rate, your monthly payments would be $83. If the rate rises over time to 15

percent, your monthly payments will increase to $125. Similarly, if you are making payments

that cover interest plus some portion of the principal, your monthly payments may increase,

unless your agreement calls for keeping payments the same throughout the plan period.

If you sell your home, you will probably be required to pay off your home equity line in full

immediately. If you are likely to sell your home in the near future, consider whether it makes

sense to pay the up-front costs of setting up a line of credit. Also keep in mind that renting your

home may be prohibited under the terms of your agreement.

2.4

If you are thinking about a home equity line of credit, you might also want to consider a

traditional second mortgage loan. This type of loan provides you with a fixed amount of money,

repayable over a fixed period. In most cases, the payment schedule calls for equal payments that

pay off the entire loan within the loan period. You might consider a second mortgage instead of a

home equity line if, for example, you need a set amount for a specific purpose, such as an

addition to your home.

In deciding which type of loan best suits your needs, consider the costs under the two

alternatives. Look at both the APR and other charges. Do not, however, simply compare the

APRs, because the APRs on the two types of loans are figured differently:

The APR for a traditional second mortgage loan takes into account the interest rate

charged plus points and other finance charges.

The APR for a home equity line of credit is based on the periodic interest rate alone. It

does not include points or other charges.

2.4.1The federal Truth in Lending Act requires lenders to disclose the important terms and costs of

their home equity plans, including the APR, miscellaneous charges, the payment terms, and

information about any variable-rate feature. And in general, neither the lender nor anyone else

may charge a fee until after you have received this information. You usually get these disclosures

when you receive an application form, and you will get additional disclosures before the plan is

opened. If any term (other than a variable-rate feature) changes before the plan is opened, the

lender must return all fees if you decide not to enter into the plan because of the change.

Lenders are also required to provide you with a list of homeownership counseling organizations

in your area.

When you open a home equity line, the transaction puts your home at risk. If the home involved

is your principal dwelling, the Truth in Lending Act gives you three days from the day the

account was opened to cancel the credit line. This right allows you to change your mind for any

reason. You simply inform the lender in writing within the three-day period. The lender must

then cancel its security interest in your home and return all fees— including any application and

appraisal fees—paid to open the account.

The Home Ownership and Equity Protection Act of 1994 (HOEPA) addresses certain unfair

practices and establishes requirements for certain loans with high rates and fees, including

certain additional disclosures. HOEPA now covers some HELOCs. You can find out more

information by contacting the CFPB at the website address and phone number listed in the

Contact information appendix, below.

2.5

Plans generally permit lenders to freeze or reduce a credit line if the value of the home “declines

significantly” or when the lender “reasonably believes” that you will be unable to make your

payments due to a “material change” in your financial circumstances. If this happens, you may

want to:

Talk with your lender. Find out what caused the lender to freeze or reduce your credit

line and what, if anything, you can do to restore it. You may be able to provide additional

information to restore your line of credit, such as documentation showing that your

house has retained its value or that there has not been a “material change” in your

financial circumstances. You may want to get copies of your credit reports (go to the

CFPB’s website at consumerfinance.gov/askcfpb/5/can-i-review-my-credit-report.html

for information about how to get free copies of your credit reports) to make sure all the

information in them is correct. If your lender suggests getting a new appraisal, be sure

you discuss appraisal firms in advance so that you know they will accept the new

appraisal as valid.

Shop around for another line of credit. If your lender does not want to restore

your line of credit, shop around to see what other lenders have to offer. If another lender

is willing to offer you a line of credit, you may be able to pay off your original line of

credit and take out another one. Keep in mind, however, that you may need to pay some

of the same application fees you paid for your original line of credit.

This glossary provides general definitions for terms commonly used in the real estate market.

They may have different legal meanings depending on the context.

DEFINED TERM

ANNUAL MEMBERSHIP OR MAINTENANCE FEE

ANNUAL PERCENTAGE RATE (APR)

APPLICATION FEE

BALLOON PAYMENT

CAP (INTEREST RATE)

. Periodic adjustment capsLifetime caps

CLOSING OR SETTLEMENT COSTS

CREDIT LIMIT

EQUITYff

INDEX

consumerfinance.gov/f/201204_CFPB_ARMs-brochure.pdf

INTEREST RATE

MARGIN

MINIMUM PAYMENT

POINTS (ALSO CALLED DISCOUNT POINTS)

SECURITY INTEREST

TRANSACTION FEE

VARIABLE RATE

For more information about mortgages, including home equity lines of credit, visit

consumerfinance.gov/mortgage. For answers to questions about mortgages and other financial

topics, visit consumerfinance.gov/askcfpb. You may also visit the CFPB’s website at

consumerfinance.gov/owning-a-home to access interactive tools and resources for mortgage

shoppers, which are expected to be available beginning in 2014.

Housing counselors can be very helpful, especially for first-time home buyers or if you’re having

trouble paying your mortgage. The U.S. Department of Housing and Urban Development (HUD)

supports housing counseling agencies throughout the country that can provide free or low-cost

advice. You can search for HUD-approved housing counseling agencies in your area on the

CFPB’s web site at consumerfinance.gov/find-a-housing-counselor or by calling HUD’s

interactive toll-free number at 800-569-4287.

The company that collects your mortgage payments is your loan servicer. This may not be the

same company as your lender. If you have concerns about how your loan is being serviced or

another aspect of your mortgage, you may wish to submit a complaint to the CFPB at

consumerfinance.gov/complaint or by calling (855) 411-CFPB (2372).

When you submit a complaint to the CFPB, the CFPB will forward your complaint to the

company and work to get a response. Companies have 15 days to respond to you and the

CFPB. You can review the company’s response and give feedback to the CFPB.

For additional information or to submit a complaint, you can contact the CFPB or one of the

other federal agencies listed below, depending on the type of institution. If you are not sure

which agency to contact, you can submit a complaint to the CFPB and if the CFPB determines

that another agency would be better able to assist you, the CFPB will refer your complaint to

that agency and let you know.

Consumer Financial Protection Bureau

Board of Governors of the Federal Reserve System

Office of the Comptroller of the Currency

Federal Deposit Insurance Corporation

Federal Housing Finance Agency

National Credit Union Administration

mycreditunion.gov

Federal Trade Commission

Securities and Exchange Commission

Farm Credit Administration Office of Congressional and Public Affairs

Small Business Administration

Commodity Futures Trading Commission

Regulatory agency Regulated entities Contact information

U.S. Department of Justice

Department of Housing and Urban Development