Question 28

The annual percentage rate must be stated in the Truth-in-Lending disclosure.

The Truth-in-Lending Act (Regulation Z) specifically requires that the annual percentage rate (APR) be disclosed to consumers. This ensures that borrowers are aware of the total cost of borrowing expressed on an annual basis.

A) attorney fees

Attorney fees are not mandated to be included in the Truth-in-Lending disclosure under Regulation Z. While these fees may be a part of the overall closing costs, they are not a required element that must be disclosed in the APR calculation.

B) cost of title policy

The cost of a title policy is also not required to be stated in the Truth-in-Lending disclosure. Although it can be part of the closing costs, it does not fall under the essential disclosures that Regulation Z specifies.

C) broker's commission

Broker's commission is not explicitly required to be disclosed in the Truth-in-Lending disclosure. This cost is typically negotiated separately and does not impact the required APR notification as per Regulation Z.

D) annual percentage rate

The annual percentage rate (APR) is a crucial component of the Truth-in-Lending disclosure. It provides borrowers with a clear understanding of the cost of credit expressed as an annual rate, which is essential for making informed financial decisions.

Conclusion

The annual percentage rate is the only option that is explicitly required by the Truth-in-Lending Act (Regulation Z) for disclosure. Other options, such as attorney fees, cost of title policies, and broker's commissions, do not meet the criteria set forth in the regulation and therefore do not need to be included in the disclosure. Thus, the APR stands out as the definitive answer for this requirement.