Pennsylvania License Law
What is the 'Real Estate Recovery Fund' administered by PREC, and who may make a claim against it?
AA fund for licensees who suffer financial hardship and need assistance paying their renewal fees
BA fund compensating consumers who suffer financial losses due to a licensee's fraud, misrepresentation, or conversion of funds✓ Correct
CA fund used by PREC to pay for investigations and disciplinary proceedings
DA fund for property owners affected by natural disasters to cover insurance deductibles
Explanation
Pennsylvania's Real Estate Recovery Fund compensates consumers (not licensees) who suffer financial losses caused by a licensed real estate broker or salesperson's fraud, misrepresentation, or conversion of funds, after exhausting other legal remedies. Claims require obtaining an unsatisfied court judgment against the licensee.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
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