California real estate disclosure laws California Real Estate Disclosures | Page 45

14. If the loan is secured by a senior trust deed of less than $30,000 or a
junior trust deed of less than $20,000, a statement that the loan is being
made in compliance with Article 7 of Chapter 3 of the Real Estate Law.
NOTE: If the loan is negotiated in Spanish, Chinese, Tagalog, Vietnamese
or Korean, the MLDS or the MLDS/GFE must be provided in that language.
The Real Estate Commissioner’s Regulations contain approved forms for the
MLDS AND MLDS/GFE. The forms each include a notice to the borrower
of the importance of stating accurately the amount, type, and priority of
existing and anticipated liens. The borrower and the broker/agent negotiating
the loan must each sign the MLDS or the MLDS/GFE. The broker/agent
negotiating the loan must keep a signed copy of the statement on file for
three years.
A broker/agent who initially holds himself/herself out as an agent arranging
a loan will be subject to this disclosure requirement even though he/she
ultimately makes the loan with his/her own money or with broker-controlled
funds. In that case, the amount of compensation disclosed will include any
loan origination fees, discounts, bonuses, or other compensation that the
broker collects as the lender.
(CAL. BUS. & PROF. §§ 10240, 10241, 10245; COMMISSIONER’S
REGULATIONS 2840, 2841, 2842.5, 2843)

D. California Required Disclosures to Certain Lenders or
Promissory Note Purchasers
1. General Disclosure Requirements.
Depending on the fact situation, a real estate broker may arrange:
•

A loan secured by real property;

•

The sale of a loan secured by real property;

•

A loan secured by a loan (the collateralized loan) which is secured by
real property; or

•

The sale of a loan secured by a collateralized loan.

Should a loan or sale of a promissory note (other than when collateralized)
have multiple lenders or note purchasers, it is governed by the multi-lender
statute and is issued as discussed below pursuant to an exemption from
qualifications and registration under the Corporate Securities Law of 1968,
as discussed below.
In both multi-lender and non multi-lender loan transactions, the broker must
give the lender or note purchaser the Lender/Purchaser Disclosure Statement

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