Oregon 30-Hour Real Estate Law Practice Test

For a home equity line of credit, within what timeframe must the lender provide the Closing Disclosure?

1. Within 3 business days

2. It isn't required for a HELOC

3. At closing

4. Within 5 business days

The correct answer is: It isn't required for a HELOC

In the context of home equity lines of credit (HELOCs), the lender is not required to provide a Closing Disclosure. This is because, unlike traditional closed-end mortgage loans, HELOCs are revolving lines of credit and function more like credit cards. Under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), a Closing Disclosure is a requirement primarily for closed-end consumer mortgage loans. The requirements for disclosures when obtaining a HELOC are different from those for traditional loans. Lenders must still provide certain disclosures, such as the Consumer Handbook on Adjustable Rate Mortgages (CHARM) if applicable, but the specific Closing Disclosure is not mandated in the case of a HELOC. Therefore, option B accurately reflects this regulation regarding the provision of the Closing Disclosure for home equity lines of credit.