California Code of Regulations › Title 10 - Investment › Chapter 6 - Real Estate Commissioner › Article 16 - Mortgage Loan Brokerage › Section 2842 - Approved Borrower Disclosure Statement for Nontraditional and Subprime Mortgage Products

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				Notwithstanding Section
				2840 of these regulations, the
				Commissioner shall publish and make available to interested persons as an
				official form of the Bureau of Real Estate Form RE 885 (Rev. 8/08) which is
				incorporated by reference, with approved format and content for the disclosure
				statement referred to in subdivision (a) of Section
				10240 of the Code and Section
				10241 of the Code.
(b) The publication of the form pursuant to
				subdivision (a) hereof is for the purpose of aiding real estate licensees in
				providing the disclosure of material information in a uniform and effective
				manner to prospective borrowers relating to home loans on one-to-four unit
				single-family residences whose loans involve a "nontraditional mortgage
				product" as that term is defined in subsection (c) below.
(c) For the purpose of this regulation, a
				"nontraditional mortgage product" is a loan that allows borrowers to defer
				repayment of principal or interest. Such products include, but are not limited
				to, interest only loans where a borrower pays no loan principal for a period of
				time and payment option loans where one or more of the payment options may
				result in negative amortization.
A "nontraditional mortgage product" does not include reverse
				  mortgages or home equity lines of credit (other than simultaneous second lien
				  loans).
(d) A real estate
				broker must obtain the prior written approval of the Commissioner if he/she
				wishes to use a form different than that referred to in subsection (a) above
				with a nontraditional mortgage product. Forms that do not adequately provide
				the information required by Sections
				10240 and/or 10241 of the Code, as
				appropriate, and in a format that is easily used by the Bureau, will not be
				approved.
1. New section
				  filed 8-29-2007; operative 9-28-2007 (Register 2007, No. 35). For prior
				  history, see Register 61, No. 15.
2. Amendment of section heading,
				  subsections (a) and (b) and NOTE filed 1-14-2008 as an emergency; operative
				  1-14-2008 (Register 2008, No. 3). A Certificate of Compliance must be
				  transmitted to OAL by 7-14-2008 or emergency language will be repealed by
				  operation of law on the following day.
3. Certificate of Compliance
				  as to 1-24-2008 order, including further amendment of subsections (a) and (b),
				  transmitted to OAL 7-3-2008 and filed 8-15-2008 (Register 2008, No.
				  33).
4. Change without regulatory effect amending subsections (a)
				  and (d) filed 6-30-2014 pursuant to section
				  100, title 1, California Code of
				  Regulations (Register 2014, No. 27).
Note: Authority cited: Sections
					 10080
					 and
					 10240.3,
					 Business and Professions Code. Reference: Sections
					 10236.4,
					 10240,
					 10240.2,
					 10240.3
					 and
					 10241,
					 Business and Professions Code.