1. (a) Notwithstanding Section 2840 of these regulations, the Commissioner shall publish and make available to interested persons as an official form of the Bureau of Real Estate Form RE 885 (Rev. 8/08) which is incorporated by reference, with approved format and content for the disclosure statement referred to in subdivision (a) of Section 10240 of the Code and Section 10241 of the Code.
2. (b) The publication of the form pursuant to subdivision (a) hereof is for the purpose of aiding real estate licensees in providing the disclosure of material information in a uniform and effective manner to prospective borrowers relating to home loans on one-to-four unit single-family residences whose loans involve a “nontraditional mortgage product” as that term is defined in subsection (c) below.

3. (c) For the purpose of this regulation, a “nontraditional mortgage product” is a loan that allows borrowers to defer repayment of principal or interest. Such products include, but are not limited to, interest only loans where a borrower pays no loan principal for a period of time and payment option loans where one or more of the payment options may result in negative amortization.

   A “nontraditional mortgage product” does not include reverse mortgages or home equity lines of credit (other than simultaneous second lien loans).

4. (d) A real estate broker must obtain the prior written approval of the Commissioner if he/she wishes to use a form different than that referred to in subsection (a) above with a nontraditional mortgage product. Forms that do not adequately provide the information required by Sections 10240 and/or 10241 of the Code, as appropriate, and in a format that is easily used by the Bureau, will not be approved.

Note: Authority cited: Sections 10080 and 10240.3, Business and Professions Code. Reference: Sections 10236.4, 10240, 10240.2, 10240.3 and 10241, Business and Professions Code.

History

1. New section filed 8-29-2007; operative 9-28-2007 (Register 2007, No. 35). For prior history, see Register 61, No. 15.

2. Amendment of section heading, subsections (a) and (b) and Note filed 1-14-2008 as an emergency; operative 1-14-2008 (Register 2008, No. 3). A Certificate of Compliance must be transmitted to OAL by 7-14-2008 or emergency language will be repealed by operation of law on the following day.

3. Certificate of Compliance as to 1-24-2008 order, including further amendment of subsections (a) and (b), transmitted to OAL 7-3-2008 and filed 8-15-2008 (Register 2008, No. 33).

4. Change without regulatory effect amending subsections (a) and (d) filed 6-30-2014 pursuant to section 100, title 1, California Code of Regulations (Register 2014, No. 27).