Lender's Representation That Borrower "Qualified" For Loan Not A Representation Borrower Could "Afford" A Loan
Question: Is a lender's representation to a borrower that the borrower can "qualify" for a mortgage loan a representation that the borrower can also "afford" the loan?
Answer: No, according to the First District Court of Appeal in Perlas v. GMAC Mortgage, LLC (No. A125212), decided August 11, 2010.
"Schumer Box" Disclosure Not "Clear and Conspicuous" As a Matter of Law
Question: Is a Schumer box disclosure describing an APR as "fixed," linked with an asterisk to a paragraph printed just below the Schumer box stating the APR could be increased under three conditions, and also coupled with language, further down the same page, providing the customer would be bound by the terms of the bank's customer agreement (which permitted the bank to change rates at any time) "clear and conspicuous" under the Truth in Lending Act?
Answer: No, as a matter of law, according to a divided Ninth Circuit Court of Appeals in Rubio v. Capital One Bank (No. 08-56544), decided July 21, 2010.