Florida Broker Practice Exam

What general phrases are allowed according to TILA, as they do not trigger additional disclosure requirements?

1. Details provided on mortgage options

2. "Owner will finance" and "favorable financing terms available"

3. Advertising with no down payment

4. Limited-time offers

The correct answer is: "Owner will finance" and "favorable financing terms available"

The correct answer is rooted in the regulations set forth by the Truth in Lending Act (TILA), which aims to promote informed use of credit by requiring clear disclosures about loan terms and costs. Certain phrases are considered general enough that they do not trigger the need for additional disclosures related to financing. The phrase "Owner will finance" and "favorable financing terms available" falls under the category of permissible general advertising statements that provide a broad indication of financing options without specifying particular terms. These phrases highlight the possibility of favorable financing arrangements without delving into particulars that would necessitate further details according to TILA requirements. This is essential in maintaining a balance between informing potential consumers about their options and avoiding overwhelming them with excessive details that could lead to confusion. In contrast, phrases such as "Advertising with no down payment" can be misleading about actual loan terms and can trigger specific disclosure requirements because they suggest a concrete financial arrangement that needs further clarification. Similarly, "Limited-time offers" may imply urgency or specific terms that would require more detailed disclosures under TILA to ensure consumers understand the implications of these offers. Understanding which phrases are general and which can trigger additional requirements is crucial for compliance with TILA regulations. It allows marketers and real estate professionals to navigate advertising effectively