Cal. Bus. & Prof. Code § 10240 requires real estate brokers licensed under the California Real Estate Law (“REL”) “who negotiates a loan to be secured directly or collaterally by a lien on real property” to provide “within three business days after receipt of a completed written loan application or before the borrower becomes obligated on the note, whichever is earlier . . . a statement in writing, containing all the information required by Section 10241.” Such statements are set forth in the California Bureau of Real Estate’s (“CalBRE”) forms Re882, Re883, and Re885 (available at http://www.dre.ca.gov/Forms/700-999.html).
Alternatively, Subsection 10240(c) allows for a modified GFE, a TIL, and the Balloon Payment notice set forth in Ibid. § 10241(h) to be provided for federally regulated residential mortgage loan transactions, if the principal amount of such loans is either $30,000 or more (if secured by a primary lien) or $20,000 or more (if secured by a secondary lien).
CalBRE provided a Revised Licensee Advisory on December 1, 2015 which provided clarification as to how the new TRID Integrated Disclosures affect these disclosure requirements (the Advisory is available at http://calbre.ca.gov/Licensees/Advisories.html). CalBRE held the following:
“Effective October 3, 2015, a ‘Loan Estimate’ that meets the requirements of and is compliant with the TILA-RESPA Integrated Disclosure rule will fulfill the requirement under B&P section 10240(c) and 10236.4 as long as the borrowers sign the ‘Loan Estimate” and are provided with a separate disclosure – contemporaneously with the Loan Estimate – that includes a statement that the Loan Estimate does not constitute a loan commitment and that the borrower may check the license status of the broker and/or loan officer by calling the Bureau of Real Estate’s license information telephone number at 1-877-373-4542 or visiting CalBRE’s Web site at www.calbre.ca.gov.”
Pursuant this Advisory, we will be providing Cx19898, which will contain all the supplemental information set forth in this Advisory. This document will be configured to print under the following conditions:
- California License Type = CA Real Estate Law
- California License Type = Not Selected
- Document Package Type = Initial Disclosure
- Print REL Supplemental Disclosure = Yes
- State Code = California
We will also be configuring the global mappings to the Loan Estimate (Cx18565) to set “Loan Estimate Signature Lines Indicator” to “Yes” when “Print REL Supplement Disclosure” also equals “Yes,” in order to have the borrower’s signature lines appear on the LE, as required by the Advisory.
New Print Trigger and Modifications to Current Documents
Also due to the Advisory Letter, we will be configuring our copies of the Re882 and Re885 forms (Cx2798 and Cx12922) to print when new indicator “Print REL Supplemental Disclosure” = “No.” This new indicator allows the Re882 and Re885 forms to print for TRID loans of a principal amount less than $30,000 (for loans secured by a primary lien) or $20,000 (for loans secured by a junior lien). Conversely, it also allows Cx19898 to print only for TRID loans of a principal amount at or above these thresholds, when set to “Yes.”
Separate from the Advisory Letter, but pursuant to our yearly-audit of state disclosures, we will be modifying the print configurations for Cx2798, Cx12922, and the “CA Comparison of Sample Mortgage Features” document (Cx13522) required under Cal. Code Regs. tit. 10, §§ 1436(d) & 1950.314.8(d), as follows:
Cx2798-
- California License Type = CA Real Estate Law
- California License Type = Not Selected
- Document Package Type = Initial Disclosure
- Lender is a Broker = Allow Any
- Print REL Supplemental Disclosure = No
- State Code = California
Cx12922–
- California License Type = CA Real Estate Law
- California License Type = Not Selected
- Print REL Supplemental Disclosure = No
- Use California RE 885 or Comparison of Sample Mortgage Features = Yes
Cx13522–
- California License Type = CA Finance Lenders Law
- California License Type = CA Residential Mortgage Lending Act
- California License Type = Not Selected
- Use California RE 885 or Comparison of Sample Mortgage Features = Yes
The primary reasons for these changes is the fact that mortgage lenders can also be licensed under the REL and, as such, may be subject to the disclosure requirements of Cal. Bus. & Prof. Code § 10240 (see Ibid. §§ 10131.1[a] & [c] and 10240[a] & [b]). As such, we are moving our criteria away from what role a client is performing to how they are licensed under California law.
In addition, California’s anti-predatory lending regulations require either Re885 or the “Comparison of Sample Mortgage Features” document to be provided for certain loans. In order to simplify processes and configurations, we are making Cx13522 generic and configuring it to print for non-REL licensees to fulfill California’s anti-predatory lending regulations, while limiting Re885 to REL licensees.
These changes will take effect on October 3, 2015. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
October 1, 2015
DR 143565, DR 183621, DR184035