Question 104

To avoid triggering full disclosure under TILA when advertising financing availability on a listed property, a real estate licensee must avoid using statements that specify payment amounts.

When advertising financing options, real estate licensees must be cautious about the statements they use to avoid triggering full disclosure requirements under the Truth in Lending Act (TILA). Specifically, they should refrain from using statements that imply specific payment amounts, such as "buy for less than $650 per month."

A) assumable loan

This statement is generally acceptable as it does not specify a payment amount and merely indicates that the loan can be taken over by another buyer. It does not trigger TILA's full disclosure requirements.

B) owner willing to finance

This option is also permissible because it indicates a willingness to offer financing without specifying terms or amounts. Therefore, it does not conflict with TILA regulations.

C) FHA and VA financing available

This statement is compliant with TILA as it refers to the types of financing options available without delving into specific payment amounts. It provides useful information without triggering the need for additional disclosures.

D) buy for less than $650 per month

This statement should be avoided as it specifies a particular payment amount, which triggers the full disclosure requirements under TILA. By mentioning a specific monthly payment, it necessitates additional disclosures regarding the cost of credit.

Conclusion

Statement D is the only option that directly mentions a specific payment amount, which could lead to triggering TILA's full disclosure requirements. Options A, B, and C do not specify payment amounts and therefore do not invoke the same regulatory scrutiny. It is crucial for real estate licensees to avoid such specific payment references to remain compliant with TILA.