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Disclosures |
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Disclosures Miscellaneous and Other Disclosure #60: Assumptions Notice to Homeowner-Release of Personal Liability 1. Purpose: To inform you that certain individuals cannot assume your loan. You are also informed that even if an approved borrower assumes the loan you are still responsible until you complete and submit a “Release from Liability” form. 2. Whom does it protect? The lender and FHA. 3. What rights do you give up? You cannot later claim you are not responsible for payments when the borrower who assumed defaults IF you are unable to provide proof that you filed the “Release from Liability” form.
Disclosure #61: Errors and Omission Compliance Agreement (all transactions) 1. Purpose: To guarantee that you will cooperate with any agency or party associated with the transaction to correct errors or sign new or additional documents if they discover an error later. 2. Whom does it protect? All parties, including the lender, title company, REALTORS®, builder, and other interested parties, except you (the borrower). 3. What rights do you give up? You must comply should you receive a request to come back and sign additional or corrected documents at a later date.
Disclosure #62: Multiple Disclosures
Disclosure #62-A: Required Seller’s Disclosure 1. Purpose: To inform the buyer of the condition of various components of the house at the time listing. 2. Whom does it protect? Both the buyer and seller. 3. What rights do you give up? BUYER: Cannot claim they were not aware of any defect which was indicated on the disclosure statement. SELLER: Cannot later claim they forgot or overlooked some defect.
Disclosure #62-C: Title Insurance… 1. Purpose: To inform the buyer that the Broker/agent has recommended you pay for the more comprehensive ALTA 98 Title Insurance policy. The decision about which policy you will have should be made PRIOR to closing. Discuss this with you REALTOR®. 2. Whom does it protect? Real estate professionals associated with the transaction. 3. What rights do you give up? You forfeit the right to bring suit later should title issues arise which are not covered by the ALTA 92 policy, but would have been covered under the ALTA 98 policy. I strongly recommend the ALTA 98 policy. This decision should be made PRIOR to closing.
Disclosure #62-E: 1031 Exchange 1. Purpose: To disclose to both buyers and sellers that they should consider the 1031 Tax Deferred Exchange Program if this is a commercial or investment transaction. You should request that your agent provide a 1031 brochure. You are also advised to seek the advice of and attorney. 2. Whom does it protect? Real estate professionals associated with the transaction. 3. What rights do you give up? You have no legal right to file for damages against the real estate professionals should you have tax issues related to the transaction at a later date.
Disclosure #62-F: New Construction 1. Purpose: To inform you that the Broker and/or agent are not responsible for quality of materials, quality or workmanship or timeliness of completion when you are building a home. 2. Whom does it protect? The Broker and/or agent. 3. What rights do you give up? You have acknowledged that no warranties, expressed or implied, have been made by the Real Estate professionals relative to the building process. They cannot later be held liable for anything related to the construction.
Disclosure #62-G: Items to be Included… 1. Purpose: To disclose to you that ALL items you expect to be part of the transaction must be in writing included as part of the purchase agreement. You cannot assume that an item is included with the sale because it is present in the home or otherwise on the property. 2. Whom does it protect? Real Estate professionals associated with the transaction. 3. What rights do you give up? It is critical that you understand you cannot demand the return of any item(s) which you failed to list in writing directly on the purchase agreement.
Disclosure #62-H: Bank Owned Properties 1. Purpose: To disclose that you take additional risk when you purchase a bank-owned or REO property. They are usually sold “as is” meaning no changes, alterations, or repairs will be made. No warranties are being made concerning condition or hazards. This is clearly a transaction where “buyer beware” applies. 2. Whom does it protect? All parties associated with the transaction, including the lender, real estate professionals, and title company. 3. What rights do you give up? You have agreed by your signature that you are aware you assume ALL RISK when you purchase such a property. NO matter what problem or hazard you later discover, now matter how expensive to correct, you have no recourse against any of the parties associated with the transaction. You said you understood. *Note: REALTORS® and buyers should be aware this includes problems such as mold.
Disclosure #62-J: Fair Housing 1. Purpose: To disclose that the real estate company, its agents and affiliates have agreed to abide by Federal and Indiana Fair Housing Laws. The do not participate in and will not condone discrimination of any kind based on race, color, religion, sex, national origin, familial status, or handicap. 2. Whom does it protect? The real estate professionals associated with the transaction. 3. What rights do you give up? As a consumer, whether you are a buyer or a seller, have agreed that you understand that the agency and its associates will not cooperate with you in violating these fair housing laws. Likewise, you cannot later claim you had no knowledge that discrimination was prohibited under the law. They told you.
Disclosure #62-N: Square Footage 1. Purpose: To disclose to you that you must assume personal responsibility for verifying the actual square footage of the house from the appraisal. The square footage quoted is believed to be accurate, but is not guaranteed, warranted, or certified by the real estate companies associated with the transaction 2. Whom does it protect? The real estate professionals associated with the transaction. 3. What rights do you give up? You have no recourse if you later discover the square footage is no what was reported to the MLS sheet. You assume responsibility for verifying that information. *Note: The tax assessor’s office for the township is a reasonable source for information on the home’s square footage.
Disclosures not assigned a number Disclosure # Gift Letter (family member) 1. Purpose: To allow both the party who is providing funds to help you purchase and the buyer who is receiving funds to declare that it is a gift. This disclosure further states that no repayment is expected. The lender want to be assured that your budget won’t be stretched with another payment. 2. Whom does it protect? The lender. 3. What rights do you give up? You have no defense later if you are struggling that part of the reason is because the payments you need to make are because of this family “loan.” You said and signed that is was a gift. Disclosure # : Itemization of Amount Financed 1. Purpose: To give you a breakdown of how the money you borrowed is being paid out. It is supposed to reflect all payouts. You should review this document paying particular attention to item D: Prepaid Finance Charge. This is the amount you borrowed to pay the mortgage broker. 2. Whom does it protect? The lender and mortgage broker. 3. What rights do you give up? You are not required to sign this page. It is part of your closing paperwork and you have been provided information to avoid the appearance that the lender was not forthright with you.
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