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#2257491 - 08/02/21 02:06 PM Marketing for Closed-End Loan
SallyGirl Offline
Joined: Aug 2014
Posts: 54
If we say "Get a mortgage loan with as little as X % down and rates as low as X.XX% APR" are there any Reg Z or UDAAP concerns? The ad will include a disclosure for a sample loan to include the terms of repayment.

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#2258233 - 08/14/21 09:14 PM Re: Marketing for Closed-End Loan SallyGirl
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,207
As long as you have a downpayment, you need to have the rest of the disclosures on 1026.24.

'(d) Advertisement of terms that require additional disclosures. (1) Triggering terms. If any of the following terms is set forth in an advertisement, the advertisement shall meet the requirements of paragraph (d)(2) of this section:
(i) The amount or percentage of any downpayment.
(ii) The number of payments or period of repayment.
(iii) The amount of any payment.
(iv) The amount of any finance charge.

(2) Additional terms. An advertisement stating any of the terms in paragraph (d)(1) of this section shall state the following terms, as applicable (an example of one or more typical extensions of credit with a statement of all the terms applicable to each may be used):
(i) The amount or percentage of the downpayment.
(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 rate,” using that term, and, if the rate may be increased after consummation, that fact.
Integrity. With it, nothing else matters. Without it, nothing else matters.

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#2258237 - 08/15/21 12:40 AM Re: Marketing for Closed-End Loan SallyGirl
rlcarey Online
10K Club
Joined: Jul 2001
Posts: 76,988
Galveston, TX
Downpayment is only a triggering term if this is credit sale - as the creditor is the seller of the goods.

24(d)(1) Triggering Terms
1. Downpayment. i. The dollar amount of a downpayment or a statement of the downpayment as a percentage of the price requires further information. By virtue of the definition of downpayment in §1026.2, this triggering term is limited to credit sale transactions.
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#2258238 - 08/15/21 11:09 PM Re: Marketing for Closed-End Loan SallyGirl
Richard Insley Online
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Richard Insley
Joined: Oct 2000
Posts: 9,986
Toano, VA
The fact that there is a downpayment in a real estate secured transaction is not the determining factor. What matters is the identity of the "person" receiving the payment. That person is always the seller of the property (real or personal.) "Downpayment" is relevant to Reg. Z disclosures ONLY when the bank is both the seller of the property AND the creditor. The most common case where this happens is self-financed sales of foreclosed real property. The same principle would apply to self-financed sales of repossessed personal property -- but in the real world, that would be a rare transaction. The only other "covered" (but rare) case I can imagine is a self-financed sale of OREO.
...gone fishing.

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