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Unformatted text preview: n general, transactions which do not involve “consumer” credit are not subject to Regulation Z.
11-2 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 11: FINANCING DISCLOSURE REQUIREMENTS
• • • Loans to organizations and governments for business, commercial, or agricultural purposes. Non–real estate credit transactions over $25,000. A loan on borrower's personal residence if the loan is for business use. Includes building a “home office” for business purposes. DISCLOSURE REQUIREMENTS
A “creditor” must furnish the borrower with a Federal Real Estate Loan Disclosure Statement, which must include: Amount Financed – The total amount of “credit extended” (frequently less than the face amount of the note). Itemization of Amount Financed – Explanation of additional charges such as appraisal, credit reports, recording, etc. Need not be repeated when estimates of settlement costs have been supplied under RESPA. Finance Charge – The total dollar amount that the credit will cost. Included in the finance charge are: • • • • Interest Loan fees, assumption fees, finder's fees, and buyer's points Premiums for mortgage–guarantee or similar insurance Loan broker's commission Not included in finance charge in a transaction secured by real property: • • • • Points paid by seller Fees for title examination, abstract of title, title insurance, property survey, and similar services Fees for preparing deeds, mortgages, and reconveyance, settlement, and similar documents Notary, appraisal, and credit report fees
Dynasty School (www.dynastySchool.com) 11-3 REAL ESTATE FINANCE
Annual Percentage Rate (APR) – Relationship between the total finance charge and the total amount financed, expressed as a percentage. Payment Schedule – The number, amounts, and timing of payments. Total of Payments – The total amount borrower will have paid at the end of the loan period. Total of payments minus amount financed equals finance charge. Other Items – Such as late payment charges, prepayment penalties, bal...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10