2020 California Code
Financial Code - FIN
DIVISION 20 - CALIFORNIA RESIDENTIAL MORTGAGE LENDING ACT
CHAPTER 9 - Brokerage Services for Borrowers
Section 50700.
(a) A residential mortgage lender, or a person or employee acting under the authority of a residential mortgage lender’s license, including a mortgage loan originator, shall not provide brokerage services to a borrower, except as provided in subdivision (c).
(b) “Brokerage services” means either of the following:
(1) Obtaining or attempting to obtain, on behalf of a borrower, a residential mortgage loan, as defined in subdivision (p) of Section 50003, secured by residential real estate, as defined in subdivision (v) of Section 50003, made with the funds of another institutional lender, as defined in paragraphs (1), (2), and (4) of subdivision (k) of Section 50003, and closed in the name of that lender, for a fee paid by the borrower or the institutional lender.
(2) Obtaining or attempting to obtain, on behalf of a borrower, a residential mortgage loan, as defined in subdivision (p) of Section 50003, secured by residential real estate, as defined in subdivision (v) of Section 50003, made with the funds of another institutional lender, as defined in paragraphs (1), (2), and (4) of subdivision (k) of Section 50003, but closed in the name of the licensee, for a fee paid by the borrower or the institutional lender.
(c) A residential mortgage lender or a mortgage loan originator employed by a residential mortgage lender may provide brokerage services under the authority of the lender’s license, if the lender first enters into a written brokerage agreement with the borrower that satisfies the requirements of Section 50701.
(d) This chapter does not authorize a residential mortgage lender licensee to do any of the following:
(1) Provide brokerage services through independent contractors.
(2) Provide brokerage services through an employee not licensed as a mortgage loan originator.
(3) Obtain or attempt to obtain for a borrower a residential mortgage loan that is a “high cost mortgage,” referred to in Section 152(aa)(1) of the federal Home Ownership and Equity Protection Act of 1994, as amended (15 U.S.C. Sec. 1602(aa)).
(4) Hold itself out to borrowers, through advertising, as a mortgage broker, rather than a residential mortgage lender. However, a licensee shall disclose its status as a broker or agent when that disclosure is required by law.
(5) Perform activity subject to Section 10131 of the Business and Professions Code, except activities authorized by this division.
(e) A mortgage loan originator may only provide brokerage services as an employee of a licensed residential mortgage lender.
(Amended by Stats. 2010, Ch. 287, Sec. 14. (SB 1137) Effective January 1, 2011.)
