Disclosures

Homeownershipmatters.com

Table of Contents
Disclosures Related to Agency & Brokerage
Disclosures Related to Consumer Rights and Responsibilities
Disclosures Related to Financing
Disclosures Related to Condition of Property
Disclosures Related to Lender, Builder, or Title Company
Miscellaneous Disclosures
Other Disclosures

Related Information:

Who Pays What at Closing?
Financing Your Dreams
Consumers Guides
Fair Housing Information



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Disclosures Related to Lender, Builder or Title Company

Disclosure #50: Flood Insurance Certification Notice

1.      Purpose: To inform the buyer where or not flood insurance is required on the loan.  The buyer is also notified that flood insurance may be required at a later time.

2.      Whom does it protect? The lender. You grant them permission to add flood insurance, at your expense, if it is later deemed necessary and you do not add it to your coverage.

3.      What rights do you give up?  You cannot refuse to get flood insurance alter because you are agreeing that you may be required to do so.

Disclosure #51: Planned Unit Development Rider

1.      Purpose: To disclose to buyer that this property is located in a Planned Unit Development. It also discloses that the buyer will pay homeowner’s associations dues and abide by covenants and restrictions.  In the event the borrower does not pay dues, the lender will pay dues and add them to amount owed on the house note.

2.      Whom does it protect? The lender and title company.

3.      What rights do you give up? You have agreed to pay dues and honor home owner association dues.  You cannot successfully challenge either one of those things at a later date.

Disclosure #52:  Sales Disclosure Form

1. Purpose: To disclose the correct information about the real estate transaction, specifically the identity of the seller, identity of the purchaser, sales price, the buyer’s primary residence, the location of the property, date of sale, number of points paid the seller (as an inducement to buy), and what kind of residence/property is being sold.
2. Whom does it protect?  All parties to the real estate transaction including Realtors, the lender, and title company.  This state form is required by the “Real Property Sales and Disclosures Act” and protects those parties if they comply with complete and accurate completion.
3. What rights do you give up?  Your concern/focus should be on the accuracy of the information being supplied.  Whether you are the buyer or the seller of the property, you will sign that it is true, under penalty of perjury.

*Note: The Title agent may complete this form, but you will be signing it.  Be sure it is accurate.

Disclosure #53:  Protection Insurance Disclosure

1.      Purpose: To notify you that if you do not keep the property insured the lender will select insurance. The coverage they buy may

a.      cost you more

b.      not protect your interest

                  Most importantly, you will be charged for the coverage through your

                  mortgage payment.

2.      Whom does it protect? The lender.

3.      What rights do you give up? You are agreeing, in advance, to accept whatever insurance, at whatever cost, the lender might later select for this loan.

*Note: Frequently, this is known as “force-placed insurance.” It is legal.  The insurance company frequently has a business affiliation with the lender.

Disclosure #54: Payment Change Due to Real Estate Tax Escrow (New Construction)

1.      Purpose: To let you know that your taxes will increase once your home has been assessed. The amount currently going into your escrow account is for the LOT ONLY, not the house.  The form does not clearly state you should expect a dramatic increase.

2.      Whom does it protect? The builder and lender primarily.

3.      What rights do you give up?  You cannot later claim that you were not told that the taxes would increase.  Nor can you deny you were told your mortgage payment would increase because of this assessment.

Disclosure #55:  Zero Defect Acknowledgement (New Construction)

1.      Purpose:  To have you state that all (every single) item in your new home is complete to you satisfaction.

2.      Whom does it protect? The builder.

3.      What rights do you give up?  You have no basis for later saying that the builder did not come back to complete various items you were told would be done shortly after closing.  After all, your signature indicated everything was complete.

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