Disclosures

A broker negotiating a loan under Article 7 with a controlled institution is not required to fill out a broker's loan statement if he is charging a commission which is not more than: -2%. -4%. -5%. -none of the above

- none of the above -The broker must provide a broker's loan statement for every loan negotiated by a broker.

The Aliquist Priolo Special Studies Zone Act is required by law to produce geological reports for project approval within:

-1/4 mile of faults. -Aliquist Priolo Special Studies Zone Act is a law requiring geological reports for project approval within 1/4 mile of earthquake faults.

According to Regulation Z, which of the following terms may not be advertised by itself? -Down payment -Monthly payment -Dollar amount of the finance charge -All of the above

-All of the above -According to Regulation Z, specific credit terms such as down payment, monthly payment, and the dollar amount of the finance charge may not be advertised unless the advertisement contains certain information.

Which of the following loans is exempt from the Truth in Lending Act on the basis of the type of loan itself?

-An agricultural loan -Business loans and agricultural loans are exempt from the Truth in Lending Act.

Broker Sam had an exclusive listing on a residence which he sold. After buyer took possession of the premises, he discovered a leak in the roof. Broker Sam had told the buyer at the time of writing up the deposit receipt that the roof was in excellent shape and did not mention the leak. The buyer filed an action against the seller and broker and at the trial it was learned that the seller had told Sam that the roof leaked. Who is liable to the buyer for the leafy roof? -Broker only -Seller only -Both broker and seller -Neither the broker nor the seller because caveat emptor applies

-Both broker and seller -Broker is liable because he owes a duty to the buyer to disclose all pertinent facts in regard to the property and not to make any false statements. The seller is also liable as the agent's principal is liable for his agent's acts done within the scope of his authority.

The Truth in Lending Act is contained in the:

-Federal Consumer Credit Protection Act. -The Consumer Credit Protection Act of 1968 was landmark legislation that launched Truth in Lending disclosures of the terms and costs of consumer credit - creditors had to state the cost of borrowing in a common language so that the consumer could determine what the charges are, compare the costs of loans, and shop for the best credit deal.

RESPA (Real Estate Settlement Procedures Act) applies to which of the following?

-First-lien residential loans for cooperatives, condominiums and one-to-four family homes -RESPA applies to first-lien residential mortgages for one-family to four-family homes, cooperatives, and condominiums.

Which of the following is not correct regarding a Mortgage Loan Disclosure Statement? -It must be kept 4 years -It must be approved by a Real Estate Commissioner -It must state amount actually received by borrower -It must state costs and commissions

-It must be kept 4 years -The Mortgage Loan Disclosure Statement states, "A copy of the form signed by the borrower must be retained by the broker for a period of three (3) years. The other three are correct.

Which of the following is true of the Uniform Settlement Statement?

-It must be made available to the borrowers at or before settlement.

When did the Transfer Disclosure Statement law take effect?

-January 1987 -The TDS law took effect in January, 1987.

Which of the following is true of lead-based paint issues? -Federal law requires homeowners test for the presence of lead-based paint before listing their home for sale. -Known lead-based paint hazards must be disclosed. -Lead-based paint must be removed before a home is listed for sale. -Both a and c are true.

-Known lead-based paint hazards must be disclosed. -No federal law requires that homeowners test for the presence of lead-based paint. However, known lead-based paint hazards must be disclosed.

What must be disclosed to purchasers under the Alquist-Priolo Special Studies Act?

-Location of earthquake fault lines -The Alquist-Priolo Special Studies Act requires a subdivider to disclose if the property is near certain earthquake faults.

Who has primary responsibility for property inspections?

-The Seller -The seller is primarily responsible for inspecting the property because he is most familiar with anything needing to be disclosed; he is legally responsible to disclose to his listing broker and all others anything that would affect the value of the property.

What is a transfer disclosure statement?

-The Transfer Disclosure Statement, also known as the TDS, is a form required by California law in most residential real estate transactions. This document is one of the seller's disclosures that buyers receive during their contract contingency period. -is given by the Transferor (Seller) of residential property even if property sold "as is"

The Interstate Land Sales Full Disclosure Act applies to which of the following?

-The interstate sale of unimproved lots -The Interstate Land Sales Full Disclosure Act applies to the interstate sale of unimproved lots, but is exempt from subdivisions consisting of fewer than 25 lots, or those in which the lots are of 20 acres or more, or lots offered for sale solely to developers.

Who has primary responsibility for disclosing the condition of a property?

-The seller -The seller must disclose anything that would affect the value of the property and is therefore in the best position to inspect the property or have it inspected.

When a seller sells his home "as is," which of the following is true? -The seller must still give the buyer a real estate transfer disclosure statement. -The sales agreement should warn that the buyer should beware. -"As is" means that nothing is warranted by the seller. -The seller is relieved from the legal obligation to give the buyer a real estate transfer disclosure statement.

-The seller must still give the buyer a real estate transfer disclosure statement. -Even though a seller sells "as is," the seller must still give the buyer a real estate transfer disclosure statement.

The law requires a seller to reveal any information that would be important to the buyer regarding the condition of the property in what document?

-Transfer Disclosure Statement -The Transfer Disclosure Statement form requires sellers to disclose known property defects, which are not limited to the physical aspects of the property but also include items such as zoning violations and nuisances in the area.

When a state official sells his home, which of the following must be given to the buyer? -Trustee disclosure -Transfer disclosure statement -Promissory note -Termite report

-Transfer disclosure statement -A transfer disclosure statement is required for all sellers of real property (1-4 residential units) in California.

Which of the following disclosure obligations is required at the time of loan closing? -Uniform Settlement Statement -RESPA disclosure statement -Controlled business arrangement disclosure -All of the above

-Uniform Settlement Statement -Lenders and settlement agents require the following disclosures at the time of loan application and loan closing: special information booklet, good-faith estimate of settlement costs, and the Uniform Settlement Statement.

The Truth in Lending Act requires a disclosure statement be given to the consumer. This statement includes: -a description of the security interest retained and used for the loan. -a listing of all items included in the finance charge. -the annual percentage rate, fully spelled out. -all of the above

-all of the above -The Truth in Lending Act requires lenders to disclose the important terms and costs of their loans, including the annual percentage rate, finance charge, the payment terms, and information about any variable-rate feature.

Under the Truth in Lending Act, the dollar amount of the finance charge is not required on:

-an agricultural loan to purchase of a farm tractor. -EXEMPT: business, commercial and agricultural loans. NOT EXEMPT: consumer and all real estate loans require a disclosure.

Broker Al listed Desi's house. Desi told the broker that the roof leaked and to tell any prospective buyers it was in need of repairs. Al, in a conversation to Mr. Simple, said the roof did not leak and was in good condition. Simple bought the property and during the rainy season the roof leaked badly. Simple COULD receive damages from:

-both the broker and the seller. -The broker owes a duty to the buyer to disclose all pertinent information that the buyer would be interested in. The seller is responsible for his agent's acts done within the scope of his authority. The seller can sue the broker for any damages.

The Real Estate Settlement Procedures Act pertains to federally related loans used to purchase 1-4 single-family property used as a personal residence. RESPA regulates:

-disclosures regarding settlement costs. -RESPA covers loans secured with a mortgage placed on a one-to-four family residential property. When borrowers apply for a mortgage loan, mortgage brokers and/or lenders must give the borrowers certain disclosures regarding settlement procedures and costs. This helps consumers understand settlement services.

A broker receives a listing on a residence the owner tells him he is selling because a freeway is planned through the neighborhood and his home is in the path of construction. He further states that even though the freeway is seven years in the future, he is anxious to sell now. When showing the property to a prospective purchaser, the broker:

-must disclose the planned freeway whether the prospect asks or does not ask. -The broker has a duty to disclose all pertinent facts to the buyer when he has knowledge of the facts. If he does not disclose these facts he could be liable for damages to the buyer.

The primary purpose of the Interstate Land Sales Full Disclosure Act is to:

-prevent fraudulent marketing schemes that may arise when land is sold without being seen by the buyers. -The purpose of the Interstate Land Sales Full Disclosure Act is to prevent fraudulent marketing schemes that may arise when land is sold without being seen by the buyers.

Target Housing refers to:

-single family home built in 1975. -Target housing refers to residential housing that was built before 1978. A special disclosure form is required advising of the possible presence of lead based paint. An exception to this rule is housing designated for the elderly or handicapped, unless children reside there also.

The California Civil Code requires a disclosure statement be delivered by the:

-transferor to transferee. -The transferor (seller) of four or less residential units must deliver the "transfer disclosure statement" to the transferee (buyer).

According to the Real Property Loan Law, whenever a licensee negotiates a loan he or she must deliver a copy of the mortgage loan disclosure statement:

-within 3 days of receipt of the loan application. -The mortgage loan disclosure statement must be given to the borrower within 3 business days of receipt of the written loan application, or before the borrower becomes obligated to complete the loan, whichever is earlier.

Which loans are exempt from the Truth in Lending Act (TILA)?

Agricultural and commercial loans are exempt from TILA

RESPA (Real Estate Settlement Procedures Act)

a law requiring full disclosure of closing costs to buyer and seller.