California real estate disclosure laws California Real Estate Disclosures | Page 52

NOTE: Federal regulations have also been promulgated for notice of
transfer of loan servicing and a notice to the borrower is now a requirement
of RESPA.
(CAL. CIV. § 2937; 12 U.S.C. §2601 et. seq.)

F. Notice of Borrower’s or Lender’s Right to Copy of
Appraisal Report
A lender on a loan to be secured by residential real property must give the
applicant (borrower) notice of the applicant’s right, upon request, to receive
a copy of the appraisal report, provided the applicant has paid for the
appraisal or other valuation of the intended security property.
The lender must give this notice with the “good faith estimate” of loan
charges required by the Real Estate Settlement Procedures Act (RESPA) and
by California law. If the loan does not fall under the RESPA requirement,
the lender must give the appraisal notice at the time of application or not
later than 15 days after receipt of the application. The notice must be a
separate document printed in not less than 10-point type. For non-residential
property (i.e., other than 1 to 4 residential units), the notice is only required
if the loan involves purchase money financing or a refinancing of purchase
money debt.
If a real estate broker makes or arranges a loan in an amount less than
$30,000 secured by a senior trust deed, or a loan of less than $20,000
secured by a junior trust deed, the broker must deliver a copy of the
appraisal to both the borrower and the lender at or before the closing of the
loan transaction. This requirement only depends on the borrower being
charged a fee for the appraisal or other valuation of the improved security
property. Finally, certain lenders and note purchasers are also entitled to
receive copies of appraisal reports prepared in connection with intended
security properties for loans being made or promissory noted being
purchased.
(15 U.S.C. § 1691 et. seq.; CAL. BUS. & PROF. §§ 10238, 10232.4, 10232.5,
10238, 10241.3, 11423)

G. Credit Terms – Truth-in-Lending and Regulation Z
The Truth-in-Lending Act (TILA) is a federal law enacted to promote the
informed use of consumer credit by requiring creditors/lenders to disclose
various terms and conditions of credit. Regulation Z and the Official Staff
Commentaries which interpret the Regulations are issued by the Board of
Governors of the Federal Reserve System to implement TILA. The Federal
Trade Commission enforces TILA and Regulation Z.

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