What regulation requires lenders to furnish a good faith estimate of settlement costs within three days?

The correct choice, which combines elements of TILA and RESPA, reflects the regulation that demands lenders provide a good faith estimate of settlement costs within three days of receiving a mortgage application. This requirement is an essential part of promoting transparency and ensuring that borrowers are informed about the costs associated with their loan transactions.

The integration of TILA (Truth in Lending Act) and RESPA (Real Estate Settlement Procedures Act) requirements under this regulation aims to facilitate better understanding for consumers regarding the terms of their loans and the associated costs. Hence, by mandating that lenders deliver a good faith estimate promptly, borrowers can make more informed decisions about their financing options and understand all fees that may be incurred at closing.

This specific rule contributes to consumer protection by ensuring transparency in the lending process, enabling borrowers to compare offers from different lenders more effectively. The combination of TILA and RESPA provisions ensures that essential information is provided upfront, reducing the likelihood of surprises at closing.

In this context, while RESPA addresses the provision of good faith estimates, it is the combined application with TILA that specifically outlines the three-day timeline for delivery. This regulatory framework is vital for maintaining fair lending practices and protecting the interests of borrowers.