The inclusion of which element in Marcia's advertisement violates state and federal law?

The presence of a balloon payment in Marcia's advertisement is what violates state and federal law. A balloon payment is a large final payment due at the end of a loan’s term after a series of smaller regular payments. Advertisements for mortgages must provide clear and complete information about the terms of the loan to ensure that consumers fully understand their obligations.

When a loan has a balloon payment, it can lead to misunderstandings for consumers who might not be prepared financially for such a significant payout at the end of the loan period. To protect consumers, laws and regulations require that all terms related to loan payments, including balloon payments, be disclosed clearly and not buried in fine print, in order to prevent deceptive advertising practices.

In contrast, a prepayment penalty, the statement "no fees," and variable interest rates do have regulations surrounding their disclosure and truthfulness in advertising, but the presence of a balloon payment is considered particularly sensitive and problematic, leading to stricter scrutiny under the law.