A loan brokerage agreement is required under Cal. Fin. Code §50701 when a borrower requests that their loan be arranged (but not provided) by a mortgage lender. DocuTech provides Cx2784 for this requirement.
Following the results of a review, the text of Cx2784 will be changed in the following ways:
1. The first paragraph of page 2 of the document will be modified to allow for variable paragraphs to print, depending on whether the borrower, lender, or seller will be paying for the broker’s compensation. In addition, a good faith estimate of the fees the broker will be collecting for their services will be disclosed.
2. An additional phrase will be added to the third paragraph of page 2, so that this paragraph will now state the
“This Agreement shall be the only agreement between the Borrower and the Broker with respect to a single loan for the property referenced above, unless applicable law allows otherwise.”
3. An additional phrase will be added to the first sentence of the fourth paragraph of page 2, so it will now state the following:
“A broker whose services are limited to providing brokerage services may not require a borrower to pay fees or charges before the residential mortgage loan closing, except for charges set forth in Cal. Fin. Code §50701(j).”
4. The last paragraph of page 2, which is not required under California law (though it contains some of the text
of Ibid. §50701), will be deleted.
5. Recitals will be added to the document above the broker’s signature line.
6. The NMLS number of the loan originator signing the document will be disclosed after the broker’s signature line.
7. Minor cosmetic changes to make the language of the document more consistent.
These changes will take effect on April 7, 2012. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.
April 6, 2012