Robert is a real estate licensee in Massachusetts helping a buyer purchase a property that was recently acquired by a lender through foreclosure. The lender is now selling the property as REO (Real Estate Owned). Which of the following Massachusetts-specific disclosure obligations applies to this transaction?
Correct Answer
C) Robert must disclose any known material defects to the buyer, and the lender may face liability under MGL Chapter 93A for misrepresentation of known defects
Massachusetts does not have a mandatory statutory seller property condition disclosure form, but real estate licensees still have disclosure obligations for known material defects under their fiduciary duties and under MGL Chapter 93A. A lender selling REO property can face Chapter 93A liability for misrepresenting or concealing known defects, and Robert as the buyer's agent must disclose known material defects to protect his client.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
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.
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