1. Real Estate Principles Tenth Edition
An Introduction to the Profession
Tenth Edition

2. Chapter 12 The Loan and the Consumer
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3. Regulation Z Truth-in-Lending Act
Requires lender to show the borrower the cost of the credit.
Requirements include:
Amount financed
Finance charge
Annual percentage rate
Total payments

4. APR
Annual percentage rate combines the interest rate with the other costs of the loan into a single figure that shows the true annual cost of the loan.

5. Right to Rescission Borrower’s right to cancel a credit transaction.
Three business days after signing to back out.
Includes Saturdays.
Does not apply to credit used for the acquisition or initial construction of your principal dwelling.

6. Triggering Items and Disclosures
Mention these
Triggers disclosure
Down payment
Any payment
Number of payments
Period of payments
Amount of any finance charge, or statement: no charge for credit
Cash price or the amount of the loan
Down payment (or none)
Number, amount, frequency of payments
Annual percentage rate (APR)
Deferred payment price or total payments

7. Loan Process
Lenders Qualify:
Borrower
Property
Title

8. Redlining
Refusing to make loans in certain areas. No
Loans! $ $ $

9. Credit Report
Provides lender with independent means of checking borrower’s credit history.
Fair Credit Reporting Act – consumer right to their file at credit bureau.
Credit Scoring – method used today to evaluate credit risk.

10. Key terms APR Credit report Fair credit reporting act Finance charge
Liquid asset
Redlining
Regulation Z
Truth-in-Lending act