California real estate disclosure laws California Real Estate Disclosures | Page 43

inform a defaulting homeowner of the availability of counseling is operative
regardless of the nature of the credit transaction, whether the homeowner has
suffered a reduced ability to make payments, or whether an arranger of
credit is present in the transaction.
(CAL. CIV. § 2956 et. seq.; 12 U.S.C. § 1701x – THE HOUSING AND
COMMUNITY DEVELOPMENT ACT OF 1987)

C. California Required Disclosures to Borrowers
Unless an appropriate exemption applies, a real estate broker who solicits or
negotiates loans on behalf of borrowers or lenders to be secured directly or
collaterally by liens on real property must deliver a written disclosure
statement to the borrower. The statement is to be delivered within three
business days of receipt of the borrower’s written loan application or before
the borrower becomes obligated to complete the loan, whichever is earlier.
The required statement, known as the Mortgage Loan Disclosure Statement
(MLDS) or the Mortgage Loan Disclosure Statement/Good Faith Estimate
(MLDS/GFE) must be in a form approved by the Real Estate Commissioner
and shall contain the following disclosures:
1. Expected maximum costs and expenses of making or arranging the loan
which are to be paid by the borrower, including, but not limited to, fees
for appraisal, settlement/escrow, credit report, title insurance, recording,
and notary services.
2. Total amount of real estate commissions/fees to be received by the
broker, regardless of the form, time, and source of payment, for services
performed in arranging the loan including, but not limited to, points,
loan origination fees, bonuses, rebates, premiums, discounts as well as
other charges received by the real estate broker in lieu of interest in
transactions where the broker acts as the lender. For example, the broker
may act as the lender only, as the lender and the arranger of the secured
loan transaction, or as a broker/agent only in the secured loan
transaction. The disclosure must distinguish between commissions/fees,
bonuses, rebates and premiums paid to the broker and loan origination
fees, bonuses, and discounts paid to the lender.
3. Liens against the real property disclosed by the borrower and whether
each lien will remain senior or will be subordinate to the lien that will
secure the subject loan(s).
4. Liens, including the lien securing the subject loan, which are anticipa ѕ