California Bus. & Prof. Code § 10240 requires certain disclosures regarding balloon payments. Subsection (c) of the statute allows the lender to use the GFE, TIL, and a separate disclosure for the balloon payment. The balloon disclosure either needs to be approved by the Commissioner, or it must conform to the disclosure in § 10241(h), upon which our CA Balloon Disclosure (Cx2800) is based.
Just prior to the implementation of the new Integrated Disclosure documents, CalBRE provided a Licensee Advisory on September 14, 2015 which clarified how the new TRID Integrated Disclosures affects these disclosure requirements in § 10240. 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 – provided 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 1-866-373-4542 or visiting CalBRE’s Web site at www.calbre.ca.gov.”
Pursuant this Advisory, we began providing our CA REL Supplemental Disclosure (Cx19898), which contains all the supplementary information set forth in the preceding paragraph. In conjunction with the Loan Estimate, Cx19898 satisfies the requirements of § 10240(c), obviating the need for the California Balloon Disclosure (Cx2800). Consequently, we will now only print Cx2800 for CA loans where the CA REL Supplemental Disclosure is not applicable. To this end, we are changing the configuration of Cx2800 to print only when “Print REL Supplemental Disclosure” (field 101158) is set to “No”.
This change will be in effect on March 30, 2016. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.