What is a common requirement for mortgage lenders under federal law?

The requirement for mortgage lenders to disclose loan origination fees is essential under federal law, specifically guided by the Truth in Lending Act (TILA). This law is designed to promote transparency in lending practices and ensure that consumers are fully informed about the costs associated with their loans. By providing clear disclosure of loan origination fees, lenders help borrowers understand the total cost of borrowing, which allows them to make more informed financial decisions.

This transparency aims to avoid any deceptive practices that can arise from hidden fees or unclear terms, ultimately fostering trust between lenders and borrowers. The requirement aligns with the broader goal of protecting consumers in the mortgage process by ensuring they have access to important information that impacts their financial commitments.

In contrast, requirements such as license renewal intervals, adherence to interest rate caps, or posting mortgage rates publicly may not be universally mandated by federal law and can vary by state or be governed by different regulations. Thus, the emphasis on disclosure of loan origination fees serves as a consistent baseline requirement under federal guidelines to ensure consumer protection in the mortgage lending process.