What does TILA refer to as the closing of a residential mortgage loan?

The correct term that TILA (Truth in Lending Act) uses to describe the closing of a residential mortgage loan is "consummation." In this context, consummation specifically refers to the point in time when the borrower becomes legally obligated under the terms of the loan, marking the final step in the mortgage process. It is a crucial concept because it establishes the legal commitment between the lender and the borrower, defining when the transaction is officially recognized.

While "finalization," "settlement," and "completion" are terms that might describe aspects of the mortgage process, they do not carry the specific legal implications defined by TILA. "Finalization" could suggest that the transaction has been completed but does not denote the legal obligation point; "settlement" typically refers to the meeting where the transfer of property occurs and payments are made, but it lacks the legal specificity of "consummation"; and "completion" could imply the end of the process but does not relate directly to TILA's terminology or legal definitions. Understanding the use of "consummation" is vital for comprehending the regulatory framework and ensuring compliance in mortgage lending practices.