Final answer:
Regulation X and Regulation Z both require financial disclosures to be provided within three business days of a mortgage loan application. These disclosures are intended to inform the borrower about the costs and terms of the mortgage.
Step-by-step explanation:
The question you've asked relates to Regulation X and Regulation Z, which are important components of mortgage lending disclosures in the United States. These regulations are part of the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), respectively. Regulation Z requires that lenders provide a loan estimate to the borrower within three business days after they receive the mortgage application. Similarly, under Regulation X, borrowers should receive a good faith estimate (GFE) within the same timeframe, although the GFE has mainly been replaced by the loan estimate after updates to the regulations in 2015.
The purpose of these disclosures is to give applicants clear and understandable information about the costs and terms of the mortgage for which they are applying. This is in line with the Federal Reserve's responsibility to ensure banks are in compliance with consumer protection laws that require transparency and fairness in lending practices.