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Reg Z Ad Triggering Terms

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Question: 
If a Realtor were to describe a property, a single family residence, and also state "Special Financing 5% Down, No PMI, $1612.06/Mo." would the requirement to disclose an APR be triggered? If so, what would be the violation for not doing so? Incidentally, this is an advertisement on a $429,900 listing.
Answer: 

Disclosing the amount of monthly payment triggers a complete advertising disclosure under Section 226.24. Assuming this is NOT a credit sale, you ignore the reference to downpayment. That leaves you with requirements to disclose the number and amount of monthly payments (including a balloon and any ARM "steps") and the APR.

Reg Z's advertising requirements apply to the advertisement, not the creditor. Therefore, the realtor is responsible for complete and accurate advertising disclosures, even though s/he is not the creditor.

First published on BankersOnline.com 5/3/04

First published on 05/03/2004

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