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Unformatted text preview: nge of existing loans. The purpose of Article 5 is to curb broker abuses in arranging loans.
The “mortgage loan broker” as defined in Section 10232, is a broker who meets the threshold criteria:
10-2 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 10: REGULATION OF LOAN BROKERAGE
Negotiates loans or sales of loans at a rate of 20 or more per year in an aggregate amount of more than two million dollars ($2,000,000). Makes collections of payments in one year in an aggregate amount of five hundred thousand dollars ($500,000). SELF–DEALING BROKER
A real estate broker who proposes to solicit and accept funds to be applied to a purchase or loan transaction in which the broker will directly or indirectly obtain the use or benefit of the funds, other than commissions for services, is defined as a “self– dealing” broker (Section 10231.2). Application – The broker who negotiates a real estate loan or the sale of an existing note and trust deed must provide the lender or purchaser with a specific disclosure statement that describes the note and trust deed being funded or offered for sale, details about the borrower, and other pertinent information. Effective July 1, 1998, every mortgage loan solicitation by a real estate broker shall include the broker's license number as well as a special Department of Real Estate consumer telephone number. DISCLOSURE REQUIREMENTS
The disclosure statement which previously was provided to only a relatively few lenders and purchasers of financing instruments is now to be given to practically all non– Institutional lenders and note purchasers. Form – Since January 1, 1989, all brokers must provide the Lender/Purchaser Disclosure Statement (RE 851) (see Form 10–1) to lenders and note purchasers except to those institutions specifically exempt (banks, savings and loans, insurance companies, pension trusts, FNMA, FHLMC, etc.). Timing – As early as practicable before accepting any funds. (A self– dealing broker must submit the form 24 hours before accepting funds.) Dynasty School (www.dynastySchool.com) 10-3 REAL E...
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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.
- Spring '10