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#2174135 - 04/18/18 07:21 PM
Re: Advertising for Loans
complynewbie13
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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Now that you're asking about dwelling secured credit ads, someone else will have to comment about the requirements of Section 1026.24(f) and beyond.
What you provide would be sufficient for fixed rate loans that are not dwelling-secured. Unless you are advertising loans to finance the sales of bank-owned repos and foreclosures, no mention of a downpayment is required. If any of the advertised credits have variable rates, see Section 1026.24(c).
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#2219778 - 08/15/19 03:59 PM
Re: Advertising for Loans
complynewbie13
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100 Club
Joined: Feb 2011
Posts: 144
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Not Adam, but I think I can help. Here's an excerpt from our Advertising training manual on closed-end loan advertisements:
a. “Triggering†Terms [§1026.24(d)(1)]: The mere mention of certain loan terms in an advertisement will trigger a requirement to disclose certain other terms of the loan. The triggering terms for closed-end credit include:
i. The amount or percentage of down payment (applies to “credit sales†only); ii. The number of payments or period of repayment; iii. The amount of any payment; and iv. The amount of any finance charge.
b. “Triggered†Terms [§1026.24(d)(2)]: If any one or more of the “triggering†above terms of the loan are stated in an advertisement, the following terms must also be disclosed (to the extent they apply):
i. The amount or percentage of the down payment (applies to “credit sales†only); ii. The terms of repayment, which reflect the repayment obligations over the full term of the loan, including any balloon payment; iii. The “annual percentage rateâ€, or “APRâ€, using one of these terms; and iv. If the rate may be increased after consummation of the loan, that fact.
In regards to the bolded section above (amount or percentage of the down payment), my understanding is down payment is a triggering term for a credit sale transaction, but for a non-credit sale transaction, when a triggering term other than down payment is used, the requirement is to state the down payment, terms of repayment, APR and if the APR can increase. Is that incorrect?
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#2219789 - 08/15/19 06:10 PM
Re: Advertising for Loans
complynewbie13
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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You're almost there! The term "downpayment" has no Reg. Z meaning whatsoever unless the transaction being advertised is a credit sale. See the definition in Section 1026.2(a)(18).
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#2242343 - 09/11/20 07:22 PM
Re: Advertising for Loans
complynewbie13
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10K Club
Joined: Jul 2001
Posts: 83,396
Galveston, TX
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Where is the ad appearing.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2242345 - 09/11/20 07:28 PM
Re: Advertising for Loans
complynewbie13
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10K Club
Joined: Jul 2001
Posts: 83,396
Galveston, TX
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Then I would be inserting an "as of date" and update when you deem it time to update or reproduce them. Not sure the value of such a generic statement to realtors. Can't customers go most anywhere and get a fixed rate loan?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2242353 - 09/11/20 08:13 PM
Re: Advertising for Loans
complynewbie13
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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Randy's advice is on the mark, but be careful how often you replace these flyers, and keep a record that could answer a compliance examiner's questions like: "how do you assure that stale ads are being withdrawn or replaced reasonably soon after the advertised rates expire?" In addition to the letter of Reg. Z, there's always the spirit of UDAAP to be considered.
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#2255515 - 06/17/21 07:57 PM
Re: Advertising for Loans
complynewbie13
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Junior Member
Joined: Dec 2020
Posts: 32
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I am looking over an advertisement that our marketing department wants to send out for our mortgage department that is a flyer and I have a question regarding their wording for the following bullet points that they have:
9 Month Construction period for fixed interest rate 12 Month construction period for adjustable rate
Would this be considered a trigger term?
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#2255607 - 06/18/21 05:36 PM
Re: Advertising for Loans
complynewbie13
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Junior Member
Joined: Dec 2020
Posts: 32
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I talked to our marketing department and they are wanting to keep the wording like it is so I am looking at the disclosures that are needed since there is a triggering term. Would I need to give two payment examples, one for the 9 Month Construction Fixed Rate and one for the 12 Month Construction Adjustable Rate?
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#2255924 - 06/24/21 08:22 PM
Re: Advertising for Loans
complynewbie13
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10K Club
Joined: Aug 2002
Posts: 47,533
Bloomington, IN
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See 1026.24(d)(2) - (ii) The terms of repayment, which reflect the repayment obligations over the full term of the loan, including any balloon payment.
How can one representative payment example disclose the legal terms for both a 9 month fixed rate term loan and a 12 month variable rate term loan?
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The opinions expressed are mine and they are not to be taken as legal advice.
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#2255951 - 06/25/21 02:11 PM
Re: Advertising for Loans
complynewbie13
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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You haven't specified the products. Are these construction-only loans, or the construction phases of construction-perm loans?
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