A lender's radio spot says, 'Buy now with only 5 percent down, 360 payments of $1,450.' Because the ad states specific credit terms, which Regulation Z requirement is triggered?
Correct Answer
B) The lender must also disclose the APR and other required credit terms
Regulation Z lists four triggering terms for a closed-end credit advertisement at 12 CFR 1026.24(d)(1): the amount or percentage of any down payment, the number of payments or period of repayment, the amount of any payment, and the amount of any finance charge. This ad states three of them. Once any one appears, 1026.24(d)(2) requires the ad to add the down payment amount or percentage, the terms of repayment over the full term, and the annual percentage rate using that term. Note that stating the APR by itself triggers nothing, and neither does an ad that only promises no down payment.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
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