Which law requires lenders to provide a borrower with a loan estimate within three days of receiving a loan application?

The requirement for lenders to provide a borrower with a loan estimate within three days of receiving a loan application is governed by the TILA and RESPA Integrated Disclosure rule. This rule was implemented to simplify the loan disclosure process and improve the clarity of information provided to borrowers.

Under this rule, which combines elements from the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), lenders must deliver a loan estimate that outlines the terms of the mortgage, estimated closing costs, and other important details to help borrowers understand the cost of their loan and compare offers from different lenders. This requirement is crucial for fostering transparency in the lending process, enabling potential borrowers to make informed decisions about their financing options.

In contrast, while the Truth in Lending Act and the Real Estate Settlement Procedures Act are important laws governing mortgage lending and disclosure, it is specifically the integrated disclosure rule that mandates the timing of the loan estimate. Other options refer to broader regulations or specific aspects of mortgage lending but do not encompass the requirement as accurately as the integrated disclosure rule does.