Truth in Lending (Regulation Z); Consumer Protections for Home Sales Financed Under Contracts for Deed

This advisory opinion affirms the current applicability of consumer protections and creditor obligations under the Truth in Lending Act (TILA) and its implementing Regulation Z to transactions in which a consumer purchases a home under a “contract for deed.” When a creditor sells a home to a buyer under a contract for deed, that transaction will generally meet TILA and Regulation Z’s definition of credit. Where the transaction is secured by the buyer’s dwelling, the buyer will also generally be entitled to the protections associated with residential mortgage loans under TILA.

Advisory opinion

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Press release

CFPB Takes Action to Stop Contract-for-Deed Investors from Setting Borrowers Up to Fail