I was actually in the loan business many years ago when Regulation Z,  Truth in Lending became law. That is when we started using the APR. I think I am correct in saying in those days we did not have adjustable rate mortgages. So the Truth in Lending was excellent in comparing fixed rate loans with fixed rate loans. But the loans are now more varied.

My client received his Truth in Lending document from the bank and the APR shows 3.576%. I know how it is computed but it certainly does not represent the loan. Here is a video that I made explaining the problem.

http://www.youtube.com/watch?v=I4Pz76trwAs

 

 

 
This post has been included in California Real Estate News

2 Comments on APR does not equal Truth in Lending

MAY
28
2010
238,128 Points 6 Featured Posts Called Shot Master

Doug: thanks for drawing attention to these facts about the APR.
11:49pm • #1
MAY
29
2010
538,118 Points 6 Featured Posts Outside Blog Called Shot Master

Good blog and nice video with some good food for thought.  Thank You!
12:21am • #2


What does the graphic say?
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