What does the Mortgage Lending Act primarily govern?

The Mortgage Lending Act primarily governs non-traditional mortgage lending institutions. This act is designed to regulate entities that operate outside the typical configuration of traditional banking institutions. Non-traditional lenders can include private mortgage companies, mortgage brokers, and other entities that do not fit the conventional roles of banks and credit unions.

The act's focus on non-traditional lenders is significant because it addresses specific practices and standards that these institutions must follow, ensuring consumer protection and fair lending practices. This includes requirements for loan disclosures, licensing, and adherence to ethical standards in mortgage origination. By regulating these entities, the Act helps create a safer and more transparent mortgage environment for borrowers who may be at increased risk when engaging with less-regulated lending options.

In contrast, the other options primarily encompass traditional banks or federal institutions, which operate under established regulations that have been in place for quite some time. The Mortgage Lending Act specifically targets the unique challenges and needs posed by non-traditional lenders.