This text of California § 50701. (50701. (Amended by Stats. 2009, Ch. 160, Sec. 83.)) is published on Counsel Stack Legal Research, covering California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
(a)As soon as practical after a borrower requests that the residential mortgage lender licensee arrange a loan to be made by another institutional lender, and before the licensee performs brokerage services for the borrower, the licensee and borrower shall enter into a written loan brokerage agreement that satisfies the requirements of this section.
(b)Both the licensee’s authorized representative, who shall be a licensed mortgage loan originator, and the borrower shall sign and date the loan brokerage agreement, and the licensee shall deliver a copy of the fully executed loan brokerage agreement to the borrower either upon execution, if the documents are signed in the licensee’s office, or within three business days after execution.
(c)The loan brokerage agreement shall include the mor
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(a)
As soon as practical after a borrower requests that the residential mortgage lender licensee arrange a loan to be made by another institutional lender, and before the licensee performs brokerage services for the borrower, the licensee and borrower shall enter into a written loan brokerage agreement that satisfies the requirements of this section.
(b)
Both the licensee’s authorized representative, who shall be a licensed mortgage loan originator, and the borrower shall sign and date the loan brokerage agreement, and the licensee shall deliver a copy of the fully executed loan brokerage agreement to the borrower either upon execution, if the documents are signed in the licensee’s office, or within three business days after execution.
(c)
The loan brokerage agreement shall include the mortgage loan originator’s unique identifier.
(d)
The loan brokerage agreement shall contain an explicit statement that (1) the licensee is acting as the agent of the borrower in providing brokerage services to the borrower, and (2) when acting as agent for the borrower, it owes to that borrower a fiduciary duty of utmost care, honesty, and loyalty in the transaction, including the duty of full disclosure of all material facts. If
the licensee is authorized to act as an agent for any other person, the brokerage agreement shall contain a statement of that fact and identification of that person.
(e)
The loan brokerage agreement shall contain a detailed description of the services the licensee agrees to perform for the borrower, and a good faith estimate of any fees the licensee will receive for those services, whether paid by the borrower, the institutional lender, or both.
(f)
The loan brokerage agreement shall carry a clear and conspicuous statement of the conditions under which the borrower is obligated to pay the licensee for brokerage services rendered under the agreement.
(g)
The loan brokerage agreement shall provide that, if the licensee makes a materially false or misleading statement or omission in the inducement or implementation of
the agreement, the borrower may, in addition to any other legal rights or remedies, upon written notice, do any of the following:
(1)
Rescind the brokerage agreement.
(2)
Recover fees paid by the borrower to the licensee for brokerage services rendered by the licensee pursuant to the agreement.
(3)
Recover actual costs, including attorney’s fees, for enforcing the borrower’s rights under the loan brokerage agreement.
(h)
If the loan brokerage agreement fails to set forth the rights in subdivision (g), these rights shall be implied by operation of law.
(i)
The loan brokerage agreement shall be the only agreement between the borrower and the licensee with respect to a single loan.
(j)
A licensee whose services to a borrower are limited to providing brokerage services may not require a borrower to pay fees or charges before the residential mortgage loan closing, other than either of the following:
(1)
Actual charges to be incurred by the licensee on behalf of the borrower for services from third parties necessary to process the application, such as credit reports, appraisals, inspections, flood certification, and tax service, and, in transactions where those services are provided by the licensee, a charge not to exceed the fee customarily charged for the same or comparable service in the community in which the service was rendered.
(2)
An application fee.
A licensee may not accept a fee under Section 50203(a)(1) or (2) and subsequently require a borrower
to pay additional fees or charges under this paragraph for the borrower’s loan transaction.
(k)
Any loan brokerage agreement that provides for the collection of an application fee shall be approved as to form by the commissioner before its use by a licensee, if the agreement meets the following requirements:
(1)
The agreement specifies the services to be rendered for the application fee.
(2)
The agreement sets forth the amount of the application fee and the date the fee becomes due and payable.
(3)
The agreement does not contain a provision that purports to except or relieve the licensee from the responsibility to fulfill verbal commitments and representations made by employees or agents of the licensee when contracting for the application fee, or
guarantee that a loan will be obtained.
(4)
The agreement sets forth a definite date for full performance of the services promised in exchange for the application fee.