California real estate disclosure laws California Real Estate Disclosures | Page 54

accomplished by giving the consumer the “Consumer Handbook on
Adjustable-Rate Mortgages” or a suitable substitute, as defined);
•

Demand features of the loan – When the creditor/lender may demand
payment in full of the loan irrespective of any stated maturity date,
excluding borrower default or the exercise of due-on-sale clauses;

•

Loan prepayment penalties – Whether such penalties are charged by
the creditor/lender or, if uncertainty exists, a statement to that effect and
whether any prepaid finance charge is subject to rebate;

•

Late payment charge –The amount of charge for delinquent payments
stated either as a percentage or a dollar amount;

•

Description of the security interest – The deed of trust or mortgage
which will be retained by the creditor/lender as security for the loan;

•

Insurance – Whether premiums for coverage are included in the finance
charge;

•

Charges or fees to be excluded from the finance charge – Certain
security interest charges such as taxes or other fees paid to public
entities, or the premium for insurance in lieu of perfecting the security
interest (if subject to the Real Estate Settlement Procedures Act
(RESPA), the required RESPA statement is a sufficient disclosure);

•

Specific terms of the contract – Those terms related to nonpayment,
default, acceleration, or prepayment penalties;

•

Due-on-sale clauses – In applicable transactions, a statement that the
loan is subject to acceleration upon sale or transfer of the security
property or of other conditions about the loan assumption policy which
are contained in the loan documents and a statement whether the
creditor/lender will allow subsequent buyers to assume the remaining
obligation; and

•

Required deposit balances by the borrower – Whether, as a condition
of the loan such balances are required and a statement that the annual
percentage rate does or does not reflect such required deposit.

The right to rescind a real estate loan applies to most consumer credit
transactions in which the creditor/lender will acquire or retain a security
interest in the borrower’s principal dwelling. The creditor/lender must
provide each borrower who is entitled to rescind with a written notice of this
right. The borrower has the right to rescind without penalty until midnight of
the third business day (Sundays and federal holidays excluded) subsequent
to completion of the following events, whichever occurs last:

-47-