real estate finance - full book (500 pgs)

Other provisions article 7 also addresses aspects of

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Unformatted text preview: ount cannot be used to determine if the loan is exempt from limitations on cost and fees. Dynasty School ( 10-21 REAL ESTATE FINANCE PREPAYMENT PENALTIES Prepayment penalties are not allowed on loans for owner–occupied dwellings after 7 years (a penalty can be charged within 7 years). (Business and Professions Code 10242.6) Twenty percent of the unpaid balance can be prepaid in any 12 month period without being subject to a prepayment penalty This means that the prepayment penalty would ordinarily only apply to 80% of the loan when it is prepaid. BROKER CONTROLLED FUNDS If a broker makes or arranges loans secured by real property and uses any broker controlled funds, the broker must advise the borrower of this fact not later than the business day following this decision but, in any event, prior to close of escrow. (Business and Professions Code 10241.2) Broker controlled funds are funds owned by the broker, a spouse, child, parent, grandparent, brother, sister in–law or any entity in which the broker alone or with one of the above has a 10% or greater interest. APPRAISAL REPORT COPY If the borrower pays for an appraisal of real property, a copy of the appraisal report must be given to both the borrower and lender at or before closing the loan transaction. (Business and Professions Code 10241.3) MAXIMUM ALLOWABLE CHARGES COST AND CHARGES The costs and expenses of a loan include appraisal fees. escrow fees, title charges, notary fees. recording fees and credit investigation fees. Maximum costs for first trust deed under $30,000 and second trust deeds under $20,000 cannot exceed 5% of the loan or $390, whichever is greater, but never more 10-22 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 10: REGULATION OF LOAN BROKERAGE than $700. (Costs and expenses can never exceed actuals or reasonably earned costs and fees.) (Business and Professions Code 10242) What the above paragraph means is that the minimum costs and fees will be $390 and t...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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