WORD: Disclose (and derivatives)

The WORDs for Today are:

Disclose—means to reveal or make known something of importance. In real estate there are many, many times when one party is required by legal practices, federal law, state statute or other legal requirement to provide information which is deemed important to other parties involved in the transaction. Failure to disclose completely and in a timely manner could be the basis of a lawsuit.

Disclosure—refers to the forms used to facilitate a required disclosure. Disclosure forms are generally created by the party who must disclose some information but some disclosure forms are created by an act of law (i.e. IRS forms, seller disclosure forms, W-2 forms). Most disclosure forms are not called disclosure forms, which may be a reason many consumers fail to appreciate their significance. Most disclosure forms require a signature from the person who receives the form as a way of documenting (acknowledgement) the receipt of certain important information. More simply stated, your signature says you were told. It is unfortunate you didn’t understand WHAT you were told or the long-term implications of that information. For an expansive list of disclosures related to real estate transactions, along with a pdf copy for your review AND an explanation of the form, log on to www.homeownershipmatters.com. Look for “Disclosures: Clear as Mud.” Good luck!

Disclosure Statement—a term commonly used to refer to the document which explains loan terms as required by the Truth in Lending Act. Broadly, a disclosure statement may be any document used by one party to convey important information to another party. Most often, by signing the document both parties are acknowledging the presenting and receipt of the information included within the disclosure. There is no proviso, most often, for understanding the disclosure. However, recent laws related to predatory lending, foreclosure consultants and mortgage brokers have begun to include language which states “the presenter must disclose and the borrower must understand” certain pertinent information. This information may include things such as fees being charged and rescission rights.

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You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)