A Florida broker is representing a buyer interested in purchasing a property through a contract for deed arrangement. The broker learns that the seller still owes $180,000 on the existing mortgage, but the contract for deed price is $220,000. What is the broker's primary concern?
Correct Answer
B) The existing mortgage may have a due-on-sale clause that could be triggered
The existing mortgage may have a due-on-sale clause that could be triggered, potentially causing the lender to demand full payment when the property is transferred via contract for deed. Option A is incorrect because profit margins are not regulated by real estate law. Option C is incorrect because contract for deed arrangements are legal in Florida when properly structured. Option D is incorrect because homestead exemption eligibility depends on occupancy and ownership, not the financing method.
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Related Topics & Key Terms
Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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