How Do I Close a Home Loan Without Disclosing the Financed Amount?

Federal regulations stipulate what must be disclosed during the length of a home mortgage loan.

Following the bursting of the housing bubble in 2008, the Truth in Lending Act was passed. The Truth in Lending Act spells out all the requirements banks must meet during the life of a home mortgage loan. The Truth in Lending Act also lists the required disclosures for the home loan. To remove the borrowed amount from the loan disclosure, an individual needs to file a non-disclosure agreement with the home loan paperwork.

Instructions

1. Talk to the mortgage broker. Not all banks will allow the buyer to file additional paperwork at the time of closing. Ensure that the financial institution will allow a non-disclosure agreement in the closing paperwork and will agree to the terms.

2. Talk to a lawyer. If the financial company does not carry a standard non-disclosure agreement, talk to a lawyer to have one drafted. Understand what the financial institution wants in the agreement, and invite a representative to be a part of the process. This process may take weeks to complete with the lender taking the time to review it thoroughly with their legal team.

3. Approve the non-disclosure agreement. Once both sides have agreed on a non-disclosure agreement for the purchase value of the home, bring it to the closing to include in the closing documents. The mortgage broker will have to sign the agreement for it to be valid.

4. Sign the agreement. Once both sides have signed the agreement, the terms and conditions are now enforceable. Non-disclosure agreements typically bar both parties from talking about the material contained within. The agreement will also spell out penalties for both sides if they violate the agreement.

5. Keep a copy of the agreement. Having a copy for your records is beneficial if the company discloses information in violation of the agreement. It also prevents the lender from saying the agreement did not exist or has become lost.

Tips & Warnings

• Talk to the lender before negotiating the loan. If the company does not offer non-disclosure agreements, find another lender. Keep copies of the non-disclosure agreement with your mortgage paperwork. The more documentation you can maintain, the more evidence you'll have the agreement was reached.

• Mortgage documents are frequently lost. Many times, the only copies that can be found are the ones provided to the buyer. Keep these in a fireproof box and make copies to be held in other locations to protect your interests.

References

• Lifset, M.: Disclosing, Documenting and Recording Residential Construction Loan Modification Agreements
• Manne, R.: Federal Reserve Sued Over Non Disclosure of Loans
• Illinois Legal Aid: Home Equity Loans