Under Truth-in-Lending, which item is not included in the finance charge?

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Multiple Choice

Under Truth-in-Lending, which item is not included in the finance charge?

Explanation:
The main idea here is how the finance charge is defined under Truth in Lending. The finance charge is the total amount charged by the creditor for obtaining credit, including interest, discount points, and loan origination fees, plus other charges that the lender imposes in connection with the loan. Fees paid to an attorney for legal services related to the transaction are not charges the creditor imposes for credit itself, so they’re not included in the finance charge. They may show up as part of closing costs or settlement costs, but they aren’t part of the finance charge. That’s why attorney’s fees are the correct answer.

The main idea here is how the finance charge is defined under Truth in Lending. The finance charge is the total amount charged by the creditor for obtaining credit, including interest, discount points, and loan origination fees, plus other charges that the lender imposes in connection with the loan. Fees paid to an attorney for legal services related to the transaction are not charges the creditor imposes for credit itself, so they’re not included in the finance charge. They may show up as part of closing costs or settlement costs, but they aren’t part of the finance charge. That’s why attorney’s fees are the correct answer.

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