This new document was announcement previously on October 5, 2015 (see http://blog.docutechcorp.com/new-document-ca-rel-supplemental-disclosure-cx19898-and-other-california-modifications). Subsequent to this announcement, the California Bureau of Real Estate issued a revised Licensee Advisory requiring the following when the Loan Estimate is used in lieu of the “RE” forms:
“If compensation that is paid by a source other than the borrower cannot be disclosed on the Loan Estimate, that compensation to be received by the real estate broker and/or loan originator may be disclosed on the separate disclosure [which includes specific statements about the LE not constituting a loan commitment and to contact the CalBRE concerning a broker’s license information]. Otherwise, the real estate broker or loan originator should provide a Mortgage Loan Disclosure Statement.” (CalBRE Revised Licensee Advisory, December 1, 2015).
As a result of this revision, we will be adding a disclosure concerning indirect broker compensation on Cx19898, since such compensation is not allowed to be disclosed on the Loan Estimate (see 12 CFR Pt. 1026, Supp. I, Paragraph 37[f][1] – 2). The following text will appear when:
- Loan Originator/Broker Compensation Paid by Borrower is empty or 0; and
- Loan Originator/Broker Compensation Paid by Seller is empty or 0; and
- Loan Originator/Broker Compensation Amount is NOT empty or 0.
“Compensation to your real estate broker and/or loan originator will be paid by someone other than you. The total amount of such compensation is either [Field 6713]% of the loan amount or $[Field 6714].”
This change will take effect on November 4, 2015. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.
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Update: We will also be modifying the configuration of Cx19898 to print in Redisclosure packages as well.
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