In this final part of our series on the rudiments of the Finance Charge, as defined under the Truth in Lending Act, we describe the process for determining whether a particular cost or fee is a Finance Charge. If you recall, in our March 2005 issue of The Compliance Wizard, we defined, in general terms, what a Finance Charge is relative to home equity lines of credit (HELOCs) and residential mortgage transactions. Our April 2005 issue discussed the types of charges, fees, and costs that must be excluded from the definition and calculation of a Finance Charge pursuant to Regulation Z Section 226.4 and the Official Board and Staff Interpretations issued by the Federal Reserve Board.

Audits are automated verification processes that occur each time a worksheet is processed in the DocMagic software. The purpose of an audit is to confirm that data entries are within predefined parameters. Audits help to minimize errors from the outset of the document preparation process. There are virtually no limits on the amount or type of audits that can be implemented to address any data element.

Pursuant to the Truth in Lending (TIL) Act, a borrower has the right to rescind consumer credit transactions, which create a non-purchase lien on the consumer's principal dwelling.1 If the important TIL disclosures are given at the time of the original credit transaction, the rescission right is three days.2 However, improper disclosure may extend this rescission period up to three years.3 Accordingly, a creditor has significant motivation to ensure that the proper notice of right to cancel is provided to the consumer at the requisite time.

Every now and then, our Compliance Department is posed the following questions, "How do you maintain compliance? What resources do you use?"

In our February, 2005 issue of The Compliance Wizard, we identified the States that have adopted "plain language" statutes and highlighted some of those statutes for our readers. In this issue, we feature a proposed amendment to a pre-existing Texas "plain language" statute.

Our Customer Service Department has received many calls recently about our California Domestic Partnership Addendum ("Addendum") to Uniform Residential Loan Application (Form 1003). Many of you have noticed that the document generates on all California loans and inquired into the purpose of this Addendum.

If your client has internet access, you can choose to have your documents available for web pickup. After DocMagic assembles your set of documents, a web pickup code is generated. By accessing this unique code, your client will be able to download the set of documents from our website.