Chapter 6: Disclosures

Question 1

Patent defects

Answer 1

Defects you can actually see with ur eyes

Question 2

Latent defects

Answer 2

Hidden defects

Question 3

Material facts are:

Answer 3

in writing, and is information that, if known, might cause a buyer to make a different decision

Question 4

Types of environmental disclosures

Answer 4

Asbestos, radon, lead, formadelhyde, hazardous waste, household hazardous waste

Question 5

Before what date do you need to provide a “Protect your family” disclosure

Answer 5

1978

Question 6

Stigmatized prop

Answer 6

Property w a negative psychological connotation (ie haunted)

Question 7

Regulation Z rules are enforced by who?

Answer 7

Federal Trade Commission

Question 8

Do you need to disclose a murder?

Answer 8

Yes, unless it has been longer than 3 years.

Question 9

Do you need to disclose a death by AIDS?

Answer 9

NO

Question 10

Example of trigger terms are:

Answer 10

20% down payment, any ACTUAL number, unless its APY.

Question 11

Do you need to disclose all information for trigger terms?

Answer 11

YES, unless its APY

Question 12

Do you need full disclosure for this advertisement: ‘Low down payment’

Answer 12

No you don’t need a full disclosure, because there is no actual number

Question 13

What is RESPA?

Answer 13

Real Estate Settlement Procedures Act

Question 14

How many units does RESPA apply to?

Answer 14

1-4 unit residential mortgage loans

Question 15

Under RESPA, what disclosures do lenders need to provide buyers?

Answer 15

Special info booklet, good faith estimate, mortgage servicing disclosure statement

Question 16

What is a kickback?

Answer 16

RESPA prohibits kickbacks, which is when you get money for referring someone to a loan officer

Question 17

What is HUD 1

Answer 17

lists the entire financial transaction, buyer must receive HUD 1 ONE DAY before closing.

Question 18

Caveat Emptor

Answer 18

Buyer Bewarre

Question 19

As is

Answer 19

Property being sold exactly as it is

Question 20

Who creates flood zone maps?

Answer 20

Federal Emergency Management Agency (FEMA)

Question 21

Asbestos

Answer 21

Colorless gas known to cause cancer

Question 22

Radon

Answer 22

Odorless gas known to cause cancer

Question 23

Lead

Answer 23

Highly toxic metal

Question 24

Brownfield

Answer 24

Abandoned commercial/industrial site complicated w contamination (think Simpsons factory lol)

Question 25

Underground storage tank is

Answer 25

somewhere to store petroleum/hazardous substances

Question 26

Superfund

Answer 26

to clean up hazardous waste dumps and respond to spills

Question 27

Interstate Land Sales Full Disclosure Act

Answer 27

regulates land sales where two or more states are involved (25 or more lots from a seller who has it in one state but wants to sell it in another?)

Question 28

Truth in lending act

Answer 28

aimed at promoting the informed use of consumer credit by requiring disclosures about its terms and costs

Question 29

Regulation Z

Answer 29

Creditor must have certain disclosures to the consumer before a contract for a loan is made

Question 30

federally related loan

Answer 30

a loan that is insured by the government

Question 31

Special info booklet is what?

Answer 31

contains consumer info on various real estate settlement services

Question 32

Closing Disclosure

Answer 32

standard form used to itemize services and fees charged to the borrower from the lender when applying for a loan

Question 33

What is a mortgage servicing disclosure statement?

Answer 33

Discloses to the borrower whether the lender intends to service the loan or transfer it to another lender

Question 34

Respa rules are:

Answer 34

• prohibits kickbacks
• requires closing disclosure
• prohibits fee splitting
• limits amount of funds lenders can require to be escrowed

Question 35

Equal Credit Opportunity Act includes:

Answer 35

Color, race, religion, national origin, sex, martial status, age, ppl getting income from public assistance

Ensures all consumers are given an equal chance to obtain credit

Question 36

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

Answer 36

prevent fraudulent marketing schemes that may arise when land is sold without being seen by the buyers.

Question 37

Target Housing refers to:

Answer 37

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.

Question 38

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

Answer 38

1/4 mile of faults

Question 39

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

Answer 39

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.

Question 40

Can buyer sue seller and broker for not disclosing info even if seller didn’t disclose info to broker?

Answer 40

Yes, the principal is responsible for agents actions under him. So the agent AND the seller can be at fault.

Question 41

When did the Transfer Disclosure Statement law take effect?

Answer 41

Jan 1987

Question 42

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

Answer 42

location of earthquake fault lines

Question 43

Which of the following disclosure obligations is required at the time of loan closing?

Answer 43

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.