Which practice requires lenders to be transparent about financial information in transactions?

The practice that requires lenders to be transparent about financial information in transactions is known as Full Disclosure. Full Disclosure mandates that lenders provide potential borrowers with all relevant information regarding the mortgage terms, fees, and costs associated with the loan. This transparency is essential for consumers to make informed decisions about their financial commitments and to ensure that they fully understand the implications of the loan they are entering into.

Lenders are obliged to disclose information such as the annual percentage rate (APR), closing costs, loan terms, and any other fees that may arise during the life of the mortgage. This practice not only protects consumers from hidden fees but also fosters trust and promotes ethical behavior within the lending industry.

The other options do not fulfill the requirement for transparency in financial transactions. Forbearance pertains to a temporary postponement of loan payments, while fraud involves deceptive practices that undermine transparency. Foreclosure refers to the legal process by which a lender takes possession of a property due to the borrower's failure to make required payments, which also does not relate to initial transparency in financial dealings.