Disclosures in Financing 16

By
Mortgage and Lending with Nationwide Funding Group

Real Property Loan Law - Article 7 - California

Mistreatment of consumers by corrupt agents created the Real Property Loan Laws legislation was passed to correct this situation. The Real Property Loan Law now applies to loans secured by first trust deeds under $30,000.00 and by second trust deeds under $20,000.00. No ballon payment is actually allowed for loans on owner-occupied homes, where a broker has been involved in the negotiation, if the term is six years or less. This specific requirement does not apply when a seller carries back a trust deed as part of the purchase price.

A real estate broker negotiating or making loans subject to the Real Property Loan Law is limited by law in the amount that may be charged as a commision. For instance, the maximum commission that the broker could charge for a $7,500.00 second trust deed with a five year term would be exactly 15%. However, on loans $30,000.00 and over for first trust deeds, and $20,000.00 or more for second trust deeds, the broker MAY charge as much as the borrower will agree to pay.

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