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Unformatted text preview: n and conditions of each recorded senior lien Any cash purchaser is to receive (source and purpose) A warning of difficulties which may arise in refinancing, if full amortization does not occur A disclosure whether negative amortization can occur Possible acceleration clauses Possible balloon payments Information about credit of borrower, his income, and a warning about Section 580b as to “deficiency judgments” Loss–payee clauses in insurance Title insurance coverages Tax service The importance of recording Dynasty School (www.dynastySchool.com) 11-13 REAL ESTATE FINANCE
Timing – Disclosure must be given before execution of the note or security documents. Buyer and vendor must give a written receipt for the disclosure; arranger must keep a copy for 3 years. Form 11-1: Seller Financing and Disclosure 11-14 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 11: FINANCING DISCLOSURE REQUIREMENTS Dynasty School (www.dynastySchool.com) 11-15 REAL ESTATE FINANCE 11-16 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 11: FINANCING DISCLOSURE REQUIREMENTS Dynasty School (www.dynastySchool.com) 11-17 REAL ESTATE FINANCE BALLOON PAYMENTS
If a balloon payment is involved, the holder of the note must mail to the trustor or successor in interest, not less than 90 days nor more than 150 days before the balloon is due, The name and address of the person to whom payment is due, The date and amount due, and Statement of trustor's right to refinance, if any. Failure to give notice postpones due date until 90 days after mailing or delivery of notice. Civil Code § 29241 – A similar requirement of notice at least 90 days in advance applies to all loans with balloon payments: On owner–occupied one– to four–family properties Made after January 1, 1984 For a term in excess of one year Disclosure – The note must include a disclosure of the right to receive notice of an impending balloon payment. REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA)
RESPA was passed in 1974 to standardize the settlement or closing...
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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