By the Division of Banks

Truth-In-Lending Disclosures For Bi-Weekly Mortgage Notes

Under Mass. Gen. Laws chapter 140D and 209 CMR 32.00 et seq., in any transaction in which consumer credit cost disclosure is applicable, the required disclosures provided to the borrower are based on the actual cost of the loan to the borrower in the event that the loan is paid according to the payment schedule which is agreed to by the lender and the borrower. Thus, a lender is not required to base its truth-in-lending disclosures on the occurrence of a future event that may or may not happen. Under 209 CMR 32.17(5), if a disclosure becomes inaccurate because of an event that occurs after the creditor delivers the required disclosures, the inaccuracy is not considered a violation of 209 CMR 32.00.