If: (1) a loan executed pursuant to Section 52512 is for a term of less than 30 years or provides for a balloon payment; (2) the loan has not been prepaid in full or the property has not been sold or transferred prior to the maturity of the loan; and (3) the borrower is not in default; the lender shall offer or arrange for refinancing of the unpaid balance of the loan upon maturity and the balance of any note due the agency pursuant to Section 52514.
The refinancing may be provided directly by the lender or another mortgage lender, or the lender may arrange at the time of making the loan pursuant to Section 52512 for the refinancing to be provided by a federally or state-chartered bank or savings and loan association doing business in this state or by a qualified mortgage banker. As used in this section “qualified mortgage banker” means a lender (1) meeting the criteria established by the Government National Mortgage Association for lenders selling over ten million dollars ($10,000,000) in mortgage loans to that organization annually, and (2) which either has conducted an ongoing business of mortgage lending in this state for not less than five years immediately preceding the making of the loan pursuant to Section 52512, or made over fifty million dollars ($50,000,000) in mortgage loans in this state during the 12 months immediately preceding the making of the loan pursuant to Section 52512. If a refinancing commitment is arranged by the lender upon the origination of the loan pursuant to Section 52512, this fact shall be fully and fairly disclosed to the borrower, a copy of the lender’s contract with the bank, savings and loan association, or qualified mortgage banker making the commitment shall be supplied to the borrower at that time, and the contract shall be fully enforceable by the borrower as a third-party beneficiary thereto, but the lender shall not be a guarantor of the obligation of the bank, savings and loan association, or qualified mortgage banker to provide refinancing.
If the original lender is a federally or state-chartered bank or savings and loan association doing business in this state or a qualified mortgage banker, it may provide the refinancing commitment to the borrower required by this section. In this event, any loan executed pursuant to Section 53512 shall contain a provision, which is fully and fairly disclosed to the borrower, which provides that any assignees or successors in interest of the original lender shall not be guarantors of the refinancing obligation, in which event the original lender’s refinancing commitment shall be fully enforceable by the borrower.
The term of the loan for refinancing shall be established so that the borrower’s repayment schedule provides for the final installment payment not less than 30 years from the date of origination of the loan pursuant to Section 52512. However, if loans at that duration are generally not available, within the meaning of subdivision (d), the lender or other obligor shall give the borrower a choice of any form of loan and maturity for that type of loan which is available at the time of refinancing, within the meaning of subdivision (d). The lender or other obligor shall inform the borrower of the types of loans and maturities available for refinancing under this section not less than 60 days prior to maturity of the loan executed pursuant to Section 52512.
The interest rate for the refinancing loan shall not exceed rates generally available in the market for the type of loan instrument provided under subdivision (d) at the time of maturity of the loan pursuant to Section 52512. No loan origination fees shall be required of the borrower, either as prepaid interest or for processing services, as a condition of obtaining a refinancing loan pursuant to this section, but the borrower may be required to pay the costs of obtaining a policy of title insurance in accordance with the lender’s requirements. The refinancing loan need not be a fixed interest rate loan, unless that is the type of loan generally offered to, and utilized by, the public pursuant to subdivision (d).
The refinancing loan may be any form of loan which, at the time of refinancing, is generally offered to, and utilized by the public, for financing housing similar to the borrower’s by banks or savings and loan associations doing business in this state.
The lender may require as a condition of the refinancing loan that it be secured by a deed of trust having a lien of first priority, and may require the borrower to submit a loan application, at least 60 days prior to the maturity of the loan made pursuant to Section 52512, including such information about the borrower and the security property as is ordinarily required of borrowers with respect to similar loans made by the lender and may impose qualifications on the borrower or property which are conventionally applied on similar loans on similar properties at that point in time.