The "Mortgage Loan Broker Law,"
(also known as the Real Property Loan Law)
Terms in this set (7)
The "Mortgage Loan Broker Law,"(also known as the Real Property Loan Law)
is found under the California Business and Professions Code, Article 7, Sections 10240-10248.
requires all loan brokers to give all borrowers the Mortgage Disclosure Statement BEFORE the borrower becomes obligated for the loan
The Mortgage Disclosure Statement
is a form that clearly and completely states ALL the information and charges associated with a particular loan.
The Mortgage Loan Broker (Real Estate Salesperson or Broker)
Present this statement to the prospective borrower within 3 days of receipt of a completed written loan application OR before the borrower is obligated to take the loan, whichever is earlier.
Have the borrower sign the statement before the borrower becomes obligated to complete the loan.
Keep this form on file for 3 years.
Senate Bill 36
designed to bring California into compliance with the federal Secure and Fair Enforcement Mortgage License Act (SAFE Act) of the Housing and Economic Recovery Act of 2008 (Public Law 110-289) became effective on January 1, 2010. By January 31, 2010, or within 30 days of commencing the activity whichever is later, all licensees must report to the Bureau of Real Estate if they make, arrange or service loans secured by real property.
Penalty fees can apply for failure to submit this required notification. Penalties are fifty dollars ($50) per day for the first 30 days the report is not filed and one hundred dollars ($100) per day for every day thereafter not to exceed a maximum of $10,000.
Anyone who negotiates real estate loans
Anyone who makes COLLECTIONS on real estate loans, if that person makes more than 10 collections per year OR collects more than $40,000.00
MUST BE A REAL ESTATE LICENSEE. I
he or she must be licensed as a California real estate BROKER.
Under Article 7, brokers who negotiate trust deed loans have specific limitations regarding commissions and expenses.
The maximum commissions for loans subject to Article 7
1. For first loans:
a. 5 percent of the principal of a loan of less than 3 years;
b. 10 percent of the principal of a loan of 3 years or more;
2. For second or other junior loans:
a. 5 percent of the principal of a loan of less than 2 years;
b. 10 percent of the principal of a loan of at least 2 years but less than 3 years;
c. 15 percent of the principal of a loan of 3 years or more.
Any costs and expenses of making a loan must meet the requirements set forth in Article 7. The charges made to a borrower cannot exceed 5% of the loan or $390.00, whichever is greater, to a maximum of $700.00
.Such charges include appraisal fees, escrow fees, notary and credit investigation fees, but EXCLUDE actual title charges and recording fees. Under Regulation 2843, the amount charged cannot exceed the actual costs and expenses paid, whether these are incurred or "reasonably earned." In addition, no charge can exceed the amount customarily charged for the same or comparable service in the community in which the services take place.