TILA section 35 loans protect consumers by:

TILA section 35 specifically addresses higher-priced mortgage loans (HPMLs) and includes provisions designed to protect consumers from potentially harmful lending practices associated with these loans. This section requires lenders to adhere to stricter guidelines, including additional disclosures and restrictions on certain fees, which help ensure that borrowers are fully informed about the cost and terms of their loans.

By imposing prohibited acts and practices, such as limitations on balloon payments, certain prepayment penalties, and the requirement for escrow accounts for property taxes and insurance, TILA section 35 seeks to reduce the risk of predatory lending and ensures that borrowers are treated fairly. This regulatory framework is essential, as it addresses potential abuses that can disproportionately affect consumers seeking higher-priced loans.

Other choices do not align with the intent of TILA section 35; prohibiting lenders from offering anything other than prime loans is an inaccurate and unrealistic limitation. Additionally, requiring extra disclosures when making prime loans does not directly relate to the specific protections offered under TILA section 35. Lastly, the assertion that TILA section 35 has no consumer protections contradicts the very purpose of this section, which is explicitly designed to safeguard consumers navigating higher-priced mortgage loans.