Disclosures

# Mortgage Loan Disclosures ## Overview Mortgage disclosures are among the most regulated aspects of real estate finance. Federal and state laws require lenders and brokers to provide borrowers with timely, accurate disclosures at multiple stages of the loan process. The purpose is to ensure borrowers understand the true cost of their loan before committing. California brokers who originate or arrange loans must be fluent in both the California Real Property Loan Law (RPLL) disclosures and the federal TRID framework. Brokers must also be aware of the broader property disclosure regime — TDS, NHD, and death disclosure — which applies to all residential transactions they supervise or participate in. --- ## The Usury Exemption for Broker-Arranged Loans — Civil Code § 1916.1 California's Constitution (Article XV, Section 1) limits interest rates. However, Civil Code § 1916.1 (last amended January 1, 2025 by SB 1146) creates a critical exemption: > "The restrictions upon rates of interest contained in Section 1 of Article XV of the California Constitution shall not apply to any loan…made or arranged by any person licensed as a real estate broker…and secured…by liens on real property." "Arranged" includes: - Broker solicitation or negotiation of loans for compensation - Broker-arranged financing connected to real estate transactions - Broker-arranged loan modifications tied to prior real estate transactions The exemption applies whether the broker acts as principal or agent. This is why hard money loans — which often carry interest rates well above the general constitutional limit — are legally permitted when…