These types of loans come with risks. Home equity loans require homeowners to put their homes up as collateral in case they default on the loan. And since property is often the single most valuable asset owned by a family, a default on a 澳洲幸运5官方开奖结果体彩网:home equity loan can have serious consequences. Because of these risks, home equity ♕loans are regulated by both indivi💜dual states and federal agencies.

In this article, we’ll look at the regulatory environmღent for home♌ equity loans and explain which federal agencies have oversight on which of these loans.

Regulations on Home Equity Loans

A home equity loan provides homeowners with the ability to borrow against the equity they've built up in their homes. The amount that homeowne🌼rs can borrow is equal to the difference between the home's current market value and 💎the outstanding amount on the homeowner's mortgage.

There aဣre essentially ꦦtwo main sources of regulation on home equity loans: individual states and the federal government.

There are a number of federal laws that relate to home equity loans. These include the 澳洲幸运5官方开奖结果体彩网:Truth in Lending Act (TILA), which details how this type of loan can be sold and provides consumers with some key rights when it comes to working with them.

Another key component of mortgage regulation is the 澳洲幸运5官方开奖结果体彩网:Real Estate Set🥂tlement Procedure🐻s Act (RESPA). This act was enacted by Congress so that buyers and sellers are given disclosures about the full settlement costs related to home buying.

Then there are laws like the Dod🍸d-Frank Wall Street Reform and Consumer Protection Act, which Congress passed following the 澳洲幸运5官方开奖结果体彩网:subprime meltdown that contributed to the 2007–2008 financial crisis.

All 澳洲幸运5官方开奖结果体彩网:U.S. states have home equity loan laws, and these laws are always changing. To keep abreast of these laws, you can reference "Pratt’s State Regulation of 2nd Mortgages & Home Equity Loans," which is updated every year.

In short, there are many rules and regulations that apply to h🔯ome equity loans, and a single ꧟loan may be subject to multiple different regulators.

Who Regulates Home Equity Loans?

Just as there are many rules and regulations that affect home equity loans, there are also many organizations that can regulate a given loan. This is because home equity loans can be issued by a wide variety of financial institutions; banks and credit unions are the most common, but home equity loans can also be taken out with commercജial or agricultural lenders. Each type of institution has its own regulator that is ultimately responsible for overseeing the loans that it issues. 

Here are the most important of these regulators:

Each of these regulators oversees a different type of lender, and some lenders are co🅰ver🌳ed by multiple federal agencies in addition to state regulators.

The Bottom Line

There are many rules that affect home equity loans: federal regulations, state laws, and codes of conduct issued by industry organizations. Exactly which federal agency regulates a particular home equity loan depends on which organization issued the loan. Home equity loans can be issued by both banks and credit unions, and by several other financial institution types—and each is regulated by a different body.