real estate finance - full book (500 pgs)

Cra ratings are made public for all banks and thrift

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Unformatted text preview: than three years shall require equal payments over the loan period with the final payment not payable until the maturity date. (Business and Professions Code 10244) 10-24 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 10: REGULATION OF LOAN BROKERAGE No installment, including the final payment, shall be greater than twice the amount of the smallest payment. The above paragraph really says that there can be no balloon payments on broker arranged loans for less than three years. Loans Under 6 Years – Owner–occupied – When the loan is for an owner–occupied dwelling, payments must be equal for loans under six years. No balloon payments for loans under six years. (Business and Professions Code 10244.1) EXEMPT FROM THE MORTGAGE LOAN BROKER LAW It is easier to state which lenders and what transactions are not covered by the law than to list those that are covered. Regulated Institutional lenders. – Purchase money transactions in which a seller carries back the loan as part of the sale price. However, if a seller is in the business of carrying back loans in eight or more transactions per year, the Mortgage loan Broker law does apply. Loans secured by first trust deeds when the principal amount is $30,000 or more. Loans secured by junior trust deeds when the principal amount is $20,000 or more. OTHER PROVISIONS Article 7 also addresses aspects of the licensee's role, liability, balloon and late payments, and insurance. Exclusive Agreement – An exclusive authorization to procure a loan requires a definite termination date and cannot exceed 45 days. Licensee as lender – A broker may lend the broker's own money, with written consent of the borrower. Since the passage of Proposition 2 in 1979, the licensed real estate broker is not limited to any maximum rate of interest for arranging or making a real estate loan. However, the broker is prohibited from imposing other charges if the broker is the lender. Full disclosure to the borrower is required. D...
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