Business and Professions Code section 10241

The statement required by Section 10240, the form of which shall be approved by the commissioner, shall set forth separately the following items:

(a)

The estimated maximum costs and expenses of making the loan, which are to be paid by the borrower, including but not limited to, the following:

(1)

Appraisal fees.

(2)

Escrow fees.

(3)

Title charges.

(4)

Notary fees.

(5)

Recording fees.

(6)

Credit investigation fees.
If a real estate licensee performs or is to perform any of the services for which costs and expenses are disclosed pursuant to this subdivision, the licensee shall be entitled to those costs and expenses in addition to the charges specified in subdivision (b).

(b)

The total of the brokerage or commissions contracted for, or to be received by, the real estate broker for services performed as an agent in negotiating, procuring, or arranging the loan or the total of loan origination fees, points, bonuses, and other charges in lieu of interest to be received by the broker if he or she elects to act as a lender rather than agent in the transaction.

(c)

Any liens against the real property, as disclosed by the borrower, the approximate amount thereof, and whether each lien will remain senior, or will be subordinate, to the lien that will secure the loan.

(d)

The estimated amounts to be paid on the order of the borrower, as disclosed by the borrower, including, but not limited to:

(1)

Fire insurance premiums.

(2)

Amounts due on prior liens, including interest or other charges arising in connection with the payment, release, reconveyance, extinction, or other removal of record of the prior liens.

(3)

Amounts due other creditors.

(4)

Assumption, transfer, forwarding, and beneficiary statement fees.

(e)

The estimated balance of the loan funds to be paid to the borrower after deducting the total of amounts disclosed pursuant to subdivisions (a), (b), and (d).

(f)

The principal amount of the loan.

(g)

The rate of interest.

(h)

The term of the loan, the number of installments, the amount of each installment, and the approximate balance due at maturity, and the following notice in 10-point bold typeface:
“NOTICE TO BORROWER: IF YOU DO NOT HAVE THE FUNDS TO PAY THE BALLOON PAYMENT WHEN IT COMES DUE, YOU MAY HAVE TO OBTAIN A NEW LOAN AGAINST YOUR PROPERTY TO MAKE THE BALLOON PAYMENT. IN THAT CASE, YOU MAY AGAIN HAVE TO PAY COMMISSIONS, FEES, AND EXPENSES FOR THE ARRANGING OF THE NEW LOAN. IN ADDITION, IF YOU ARE UNABLE TO MAKE THE MONTHLY PAYMENTS OR THE BALLOON PAYMENT, YOU MAY LOSE THE PROPERTY AND ALL OF YOUR EQUITY THROUGH FORECLOSURE. KEEP THIS IN MIND IN DECIDING UPON THE AMOUNT AND TERMS OF THIS LOAN.”

(i)

A statement containing the name of the real estate broker negotiating the loan, his or her license number, and the address of his or her licensed place of business.

(j)

If the broker anticipates that the loan to the borrower may be made wholly or in part from broker-controlled funds, a statement to that effect.
For purposes of this section, “broker-controlled funds” means funds owned by the broker, by a spouse, child, parent, grandparent, brother, sister, father-in-law, mother-in-law, brother-in-law, or sister-in-law of the broker, or by any entity in which the broker alone or together with any of the above relatives of the broker has an ownership interest of 10 percent or more.

(k)

The terms of prepayment privileges and penalties, if any.

(l)

A statement that the purchase of credit or credit disability insurance is not required as a condition for the making of the loan.

(m)

If the loan is one that is within the limits specified in Section 10245, a certification by the real estate licensee negotiating the loan that the loan is being made in compliance with the provisions of this article.

Source: Section 10241, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=BPC§ionNum=10241.­ (accessed May 9, 2025).

Last Updated

Apr. 24, 2025

§ 10241’s source at ca​.gov