What parts of the advertising provisions of Regulation Z apply to the real estate industry?
Generally only Sections 226.10(a) and (d) will apply to real estate transactions. 226.10(a) sets forth the overriding principle that no advertisement should contain terms (such as monthly payment amounts or down payment amounts) that are not usually and customarily arranged by the creditor. In essence, this section is designed to make “bait” advertising of credit terms expressly in violation of Federal Law. Example: An advertisement offering new homes at “11,000 down” is improper if the seller will not usually accept this amount as a down payment, even if all of the other required credit terms are disclosed in the advertisement II. ADVERTISING OF REAL ESTATE CREDIT A. Assumptions Advertisements of assumption generally involve the use of the one credit term that does not trigger the full disclosure required in 226.10(dX2)-the rate of finance charge. In order to comply, the advertiser may state the rate and nothing else, but it must be ex pressed as an “Annual Percentage( Rate,” using th
