California real estate disclosure laws California Real Estate Disclosures | Page 61

creditors/lenders. In such transactions, a real estate broker acting as a
mortgage broker is to complete and timely deliver to the borrower the
California required Mortgage Loan Disclosure Statement/Good Faith
Estimate (MLDS/GFE).
TILA also includes detailed requirements for the advertising of consumer
credit, including real estate loans, and TILA describes various acts which
creditors/lenders are prohibited from performing.
(15 U. S.C. § 1601, et. seq.; 12 C.F.R. PART 226 et. seq.- (REG. Z, TRUTH IN
LENDING))

L. Disclosure by Agent Receiving Compensation from a
Lender
A real estate licensee who acts as the agent for either party in the sale, lease
or exchange of real property, a mobilehome, or a business opportunity must
disclose to both parties the form, amount, and source of any compensation
received or expected to be received from a lender in connection with the
securing of financing related to the transaction. The disclosure must be given
to each party to the transaction before the transaction closes escrow. Real
estate licensees must disclose to their principals all compensation or
expected compensation, regardless of the form of the time of payment.
(COMMISSIONER’S REGULATION 2904 AND CAL. BUS. & PROF. § 10176(a),
(g))
NOTE: California Business and Professions Code Section 10177.4 prohibits
certain referrals for compensation. A real estate licensee may not receive
compensation for referring customers to any escrow agent, structural pest
control firm, home protection company, title insurer, controlled escrow
company, or underwritten title company. Further, receipt of such
compensation from an employee of a title insurer, underwritten title
company or controlled escrow company may constitute commercial bribery.
See Penal Code Section 641.4.

M. Adjustable Rate Loan Disclosure
A lender offering adjustable-rate residential mortgage loans must provide
prospective borrowers with a copy of the most recent Federal Reserve Board
publication which provides information on such loans. It is entitled
“Consumer Handbook on Adjustable-Rate Mortgages” and is available at
http://www.hud.gov/cnsumgd.cfm. The publication must be given at the
earlier of:

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