As the mortgage industry downturn continues there are more and more complaints against broker advertising. Such complaints are often made by business competitors. It is important to comply with section 2848(a)(17) of the Regulations of the Real Estate Commissioner. The Regulation requires the prominent disclosure of the following:
- Principal amount
- Term of loan
- Initial interest rate
- Number of months the initial interest rate will be in effect
- Fully-indexed interest rate
- Maximum interest rate
- If different, an explanation of the difference between the payment rate, initial interest rate and fully-indexed rate
- Annual percentage rate
- How often the interest rate and payments can change
- Maximum periodic change in the interest rate and payments (periodic caps)
- Number of month and percentage of original loan amount after which minimum payments will not be accepted and the loan re-amortizes
- The monthly payment based on the maximum interest rate, and the loan balance after all negative amortization is included, assuming minimum payments are made
- If the loan contains a prepayment penalty, a statement to that effect
- If the loan contains a balloon payment, a statement to that effect
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