California real estate disclosure laws California Real Estate Disclosures | Page 53

TILA requires a creditor to be responsible for furnishing certain disclosures
to the consumer before making a contract for a loan. With respect to real
estate loans, a “creditor” includes (among others) a person or company who
regularly extends credit for loans secured by a dwelling, including a
mobilehome or trailer (if used as a residence), and the credit extended is
subject to a finance charge or is payable by written agreement in more than
four installments, excluding the down payment. For the purposes of TILA,
regularly extending credit is defined to mean five or more transactions per
year. In the case of high-cost mortgages, the threshold is two or more per
year if made directly by the creditor/lender, or one or more per year when
the loan is made through a real estate broker performing as a mortgage
broker.
Exemptions from TILA with respect to real estate loans include, among
others:
•

credit extended primarily for business, commercial, or agricultural
purposes; or

•

credit extended to other than a natural person, i.e., an entity.

Regulation Z requires that creditors make certain disclosures for real
property secured loans. The first four disclosures must include simple
descriptive phrases of explanation similar to those shown in italics, as
follows:
•

Amount financed – The amount of credit provided to you or on your
behalf (principal amount borrowed less prepaid finance charges
includable);

•

Financ