104. To avoid triggering full disclosure under TILA when advertising financing availability on a listed property, which of the following statements must a real estate licensee avoid using?
Answer: D
Real estate licensees must avoid using the statement "buy for less than $650 per month" when advertising financing availability.
Using the statement "buy for less than $650 per month" can trigger full disclosure requirements under the Truth in Lending Act (TILA) because it implies specific financing terms that necessitate additional disclosures.
A) assumable loan
The term "assumable loan" typically does not trigger TILA full disclosure requirements because it refers to a type of loan that can be taken over by a buyer without needing new financing. This statement does not imply specific monthly payment amounts or terms that would require further disclosures.
B) owner willing to finance
The phrase "owner willing to finance" generally indicates that the seller is open to providing financing to the buyer. While this suggests a financing option, it does not specify payment amounts or terms, thus avoiding the triggering conditions set by TILA for mandatory disclosures.
C) FHA and VA financing available
Stating "FHA and VA financing available" informs potential buyers about the types of loans accessible for the property but does not specify payment terms or amounts. Therefore, it does not trigger TILA full disclosure requirements, as it does not imply a specific financial arrangement or monthly payment.
D) buy for less than $650 per month
Using the statement "buy for less than $650 per month" is problematic as it suggests specific financing terms and payment amounts. This type of wording can invoke TILA's disclosure requirements, as it directly relates to the cost of financing, which must be disclosed fully to potential borrowers.
Conclusion
The statement that must be avoided by real estate licensees is "buy for less than $650 per month" because it implies specific financing terms that trigger TILA full disclosure requirements. The other options do not present specific payment amounts or terms, hence they do not result in the same regulatory obligations. Understanding these distinctions is crucial for compliance with TILA when advertising financing options.