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23 Federal Laws that Apply to Real Estate Sales

23 Federal Laws that Apply to Real Estate Sales FEBRUARY 2012 | BY ROBERT FREED MAN Residential real estate has become more complex over the years as a result of laws enacted to protect consumers' welfare. Here are 23 federal laws that play a part in residential real estate. The list is not exhaustive, and some apply to more than one part of the transaction, but it provides an idea of how much of what you do falls under federal regulation. Laws that impact businesses generally, including laws governing truth in advertising, aren't included. Note: Each item links to a summary of the law. The summaries were current as of early 2012 but you can expect changes to them over time. For additional guidance on these regulations -and on laws in your state that apply to residential real estate-consult a qualified attorney. PRE-TRANSACTION 2 TRANSACTION 3 POST-TRANSACTION PROSPECTING S EARNEST MONEY 15 INCOME TAX Do Not Call Act, Junk Fax Prevention Act, USA Patrlot Act IRS Schedule C: Profit or Loss CAN-SPAM Act Regulates reporting of earnest money deposits from Business Requires business expense tracking by independent Regulate marketing to consumers. MAP Mortgage Acts and Practices APPRAISAL Regulates information about lenders' loan products contractors Dodd-Frank Wall Street Reform and Mortgage Interest Deductions Qualified taxpayers can deduct mortgage interest and real estate taxes Consumer Protection Act Prohibits coercion, requires disclosures, regulates compensation PROMOTING MARS Mortgage Assistance Relief Services Regulates promotion of business involved in short sales or loan mods FIRREA FInancial Institutions Reform, Recovery, Capital Galns Exclusion Qualified taxpayers pay no capital gains tax on sale if gain is under $500,000 (for a couple) and Enforcement Act Regulates appraisers and appraisal standards LISTING & SHOWING INSURANCE Residentlal Lead-Based Palnt Hazard NFIP National Flood Insurance Program Requires flood insurance in designated areas LE MORTGAGE HMDA Home Mortgage Disclosure Act Requires lender to report on loans made Reduction Act Requires disclosure of lead-based paint Title VIII of the Civil Rights Act (Falr Housing) Prohibits discrimination in housing LOAN transactions MRAPL Mortgage Reform and Antl-Predatory Lending Act Governs lender compensation, requires risk-retention SAFE Secure and Falr Enforcement for Mortgage Licensing Act Regulates and requires mortgage licensing of loan originators CRA Community Reinvestment Act Requires banks to loan in all areas in which they collect deposits RESPA Real Estate Settlement Procedures Act Regulates disclosure of affiliated businesses and estimated costs TILA Truth in Lending Act Regulates disclosure of anticipated credit costs ECOA Equal Credit Opportunity Act Prohibits discrimination in credit transactions FCRA Falr Credit Reporting Act Makes free credit reports available, protects consumer privacy HOEPA Home Ownership and Equlty Protection Act Prohibits equity stripping

23 Federal Laws that Apply to Real Estate Sales

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Residential real estate has become more complex over the years as a result of laws enacted to protect consumers' welfare. Here are 23 federal laws that play a part in residential real estate.

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