BILL NUMBER: SB 376 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 15, 2011
AMENDED IN SENATE APRIL 7, 2011
INTRODUCED BY Senator Fuller
(Coauthor: Senator Correa)
FEBRUARY 15, 2011
An act to amend Section 10131, Sections
10131, 10237, and 10238 of, and to add Section 10131.8 to,
of the Business and Professions Code, and to
amend Section 25102.5 of the Corporations Code, relating to
real estate brokers.
LEGISLATIVE COUNSEL'S DIGEST
SB 376, as amended, Fuller. Real estate brokers.
Existing
(1) Existing law provides for the
licensure and regulation of real estate brokers and defines "real
estate broker" for its purposes to include a person who, among other
things, (1) (A) solicits borrowers or
lenders for, or negotiates loans, collects payment, or performs
services for, borrowers, lenders, or note owners in connection with
loans secured directly or collaterally by liens on real property or
on a business opportunity, or (2) (B)
sells or offers to sell, buys or offers to buy, or exchanges or
offers to exchange a real property sales contract, or a promissory
note secured directly or collaterally by a lien on real property or a
business opportunity.
This bill would revise the definition of "real estate broker" to
include , in addition, a person who performs those actions
in connection with a chattel mobilehome loan, as specified. The bill
would also provide that a licensed real estate broker who performs
specified actions, and who makes, arranges, or services chattel
mobile home mobilehome loans, as
specified, need only meet the licensure requirements of specified
provisions of law.
(2) Existing law, the Real Estate Law, the violation of which is a
crime, provides that any transaction that involves the sale of or
offer to sell a series of notes secured directly by interests in one
or more parcels of real property, or the sale of undivided interests
so secured equivalent to a series transaction, shall comply with
specified requirements, including, among other things, filing a
notice regarding the transaction, on a specified form, with the Real
Estate Commissioner, that each parcel of real property is located in
this state, and that the notes, by their terms, are not subordinate
to any subsequently created deed of trust. Under existing law, a
transaction that satisfies those requirements is exempt from
specified requirements regarding the qualification of securities
prior to their sale.
This bill would also apply those requirements and exemptions to a
transaction that involves the sale or offer to sell a series of notes
pertaining to chattel loans secured directly by interests in one or
more mobilehomes, or the sale of undivided interests so secured
equivalent to a series transaction.
(3) Because this bill would expand the scope of a crime, the bill
would create a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10131 of the Business and Professions Code is
amended to read:
10131. A real estate broker within the meaning of this part is a
person who, for a compensation or in expectation of a compensation,
regardless of the form or time of payment, does or negotiates to do
one or more of the following acts for another or others:
(a) Sells or offers to sell, buys or offers to buy, solicits
prospective sellers or purchasers of, solicits or obtains listings
of, or negotiates the purchase, sale or exchange of real property or
a business opportunity.
(b) Leases or rents or offers to lease or rent, or places for
rent, or solicits listings of places for rent, or solicits for
prospective tenants, or negotiates the sale, purchase or exchanges of
leases on real property, or on a business opportunity, or collects
rents from real property, or improvements thereon, or from business
opportunities.
(c) Assists or offers to assist in filing an application for the
purchase or lease of, or in locating or entering upon, lands owned by
the state or federal government.
(d) Solicits borrowers or lenders for or negotiates loans or
collects payments or performs services for borrowers or lenders or
note owners in connection with loans secured directly or collaterally
by liens on real property, or chattel mobilehome loans if the
mobilehome has been registered under Part 2 (commencing with Section
18000) of Division 13 of the Health and Safety Code, or on a business
opportunity.
(e) Sells or offers to sell, buys or offers to buy, or exchanges
or offers to exchange a real property sales contract, or a promissory
note secured directly or collaterally by a lien on real property, or
a chattel mobilehome loan secured by a mobilehome that has been
registered under Part 2 (commencing with Section 18000) of Division
13 of the Health and Safety Code, or on a business opportunity, and
performs services for the holders thereof.
SEC. 2. Section 10131.8 is added to the Business and Professions
Code, to read:
10131.8. A person licensed as a real estate broker who acts
pursuant to Section 10131.1, or subdivision (d) or (e) of Section
10131, and who makes, arranges, or services chattel mobilehome loans,
if the mobilehome has been registered under Part 2 (commencing with
Section 18000) of Division 13 of the Health and Safety Code, need
only meet the requirements for licensure under this part.
SEC. 3. Section 10237 of the Business
and Professions Code , as added by Section 2 of Chapter
901 of the Statutes of 2003, is amended to read:
10237. Any transaction that involves the sale of or offer to sell
a series of notes secured directly by interests in one or more
parcels of real property or pertaining to chattel loans secured
by one or more mobilehomes , or the sale of undivided interests
in a note secured directly by one or more parcels of real property
or in a note pertaining to a chattel loan secured directly by
one or more mobilehomes, equivalent to a series transaction,
shall comply with all of the provisions of this article.
SEC. 4. Section 10238 of the Business
and Professions Code is amended to read:
10238. (a) A notice in the following form and containing the
following information shall be filed with the commissioner within 30
days after the first transaction and within 30 days of any material
change in the information required in the notice:
TO: Real Estate
Commissioner
Mortgage Loan
Section
2201
Broadway
Sacramento, CA 95818
This notice is filed pursuant to Section 10237 of
the Business and Professions Code.
( ) Original Notice ( ) Amended Notice
1. Name of Broker conducting transaction under
Section 10237:
_______________________________________________
2. Broker license identification number: _________
3. List the month the fiscal year ends: __________
4. Broker's telephone number: ____________________
5. Firm name (if different from ""1''):
_______________________________________________
6. Street address (main location):
_____________________________________________
# and Street City State ZIP Code
7. Mailing address (if different from ""6''):
_______________________________________________
8. Servicing agent: Identify by name, address,
and telephone number the person or entity who
will act as the servicing agent in
transactions pursuant to Section 10237
(including the undersigned Broker if that is
the case):
_______________________________________________
_______________________________________________
9. Total number of multilender notes arranged: ___
10. Total number of interests sold to investors on
the
multilender's notes: __________________________
11. Inspection of trust account (before answering
this question, review the provisions of
paragraph (3) of subdivision (k) of Section
10238).
CHECK ONLY ONE OF THE FOLLOWING:
( ) The undersigned Broker is (or expects to be)
required to file reports of inspection of its
trust account(s) with the Real Estate
Commissioner pursuant to paragraph (3) of
subdivision (k) of Section 10238.
Amount of Multilender Payments Collected Last
Fiscal Quarter: ___________________________________
Total Number of Investors Due Payments Last Fiscal
Quarter: __________________________________________
( ) The undersigned Broker is NOT (or does NOT
expect to be) required to file reports of
inspection of its trust account(s) with the
Real Estate Commissioner pursuant to paragraph
(3) of subdivision (k) of Section 10238.
12. Signature. The contents of this notice are
true and correct.
____________ __________________________________
Date Type Name of Broker
__________________________________
Signature of Broker or of
Designated Officer of
Corporate Broker
__________________________________
Type Name of Person(s) Signing
This Notice
NOTE: AN AMENDED NOTICE MUST BE FILED BY THE BROKER WITHIN 30 DAYS OF
ANY MATERIAL CHANGE IN THE INFORMATION REQUIRED TO BE SET FORTH
HEREIN.
(b) A broker or person who becomes the servicing agent for notes
or interest sold pursuant to this article, upon which payments due
during any period of three consecutive months in the aggregate exceed
one hundred twenty-five thousand dollars ($125,000) or the number of
persons entitled to the payments exceeds 120, shall file the notice
required by subdivision (a) with the commissioner within 30 days
after becoming the servicing agent.
(c) All advertising employed for transactions under this article
shall show the name of the broker and comply with Section 10235 and
Sections 260.302 and 2848 of Title 10 of the California Code of
Regulations. Brokers and their agents are cautioned that a reference
to a prospective investor that a transaction is conducted under this
article may be deemed misleading or deceptive if this representation
may reasonably be construed by the investor as an implication of
merit or approval of the transaction.
(d) Each parcel of real property or mobilehome directly
securing the notes or interests is shall be
located in this state, the note or notes are
shall not by their terms be subject to
subordination to any subsequently created deed of trust upon the real
property, and the note or notes are shall
not be promotional notes secured by liens on
separate parcels of real property in one subdivision or in contiguous
subdivisions. For purposes of this subdivision, a
promotional note "promotional note" means a
promissory note secured by a trust deed, executed on unimproved real
property or executed after construction of an improvement of the
property but before the first purchase of the property as so
improved, or executed as a means of financing the first purchase of
the property as so improved, that is subordinate, or by its terms may
become subordinate, to any other trust deed on the property.
However, the term "promotional note" does not include either of the
following:
(1) A note that was executed in excess of three years prior to
being offered for sale.
(2) A note secured by a first trust deed on real property in a
subdivision that evidences a bona fide loan made in connection with
the financing of the usual cost of the development in a residential,
commercial, or industrial building or buildings on the property under
a written agreement providing for the disbursement of the loan funds
as costs are incurred or in relation to the progress of the work and
providing for title insurance ensuring the priority of the security
as against mechanic's and materialmen's liens or for the final
disbursement of at least 10 percent of the loan funds after the
expiration of the period for the filing of mechanic's and materialmen'
s liens.
(e) The notes or interests are shall be
sold by or through a real estate broker, as principal or agent.
At the time the interests are originally sold or assigned, neither
the broker nor an affiliate of the broker shall have an interest as
owner, lessor, or developer of the real property or
mobilehome securing the loan, or any contractual right to
acquire, lease, or develop the real property or
mobilehome securing the loan. This provision does
shall not be construed to prohibit a
broker from conducting the following transactions if, in either case,
the disclosure statement furnished by the broker pursuant to
subdivision (l) discloses the interest of the broker or affiliate in
the transaction and the circumstances under which the broker or
affiliate acquired the interest:
(1) A transaction in which the broker or an affiliate of the
broker is acquiring the real property or mobilehome
pursuant to a foreclosure under, or sale pursuant to, a deed of
trust securing a note for which the broker is the servicing agent or
that the broker sold to the holder or holders.
(2) A transaction in which the broker or an affiliate of the
broker is reselling from inventory real property or a
mobilehome acquired by the broker pursuant to a foreclosure
under, or sale pursuant to, a deed of trust securing a note for which
the broker is the servicing agent or that the broker sold to the
holder or holders.
(f) (1) The notes or interests shall not be sold to more than 10
persons, each of whom meets one or both of the qualifications of
income or net worth set forth below and signs a statement, which
shall be retained by the broker for four years, conforming to the
following:
Transaction Identifier:__________________________
Name of Purchaser:_____________________ Date:____
Check either one of the following, if true:
( ) My investment in the transaction does not
exceed 10% of my net worth, exclusive of
home, furnishings, and automobiles.
( ) My investment in the transaction does not
exceed 10% of my adjusted gross income for
federal income tax purposes for my last tax
year or, in the alternative, as estimated
for the current year.
_________________
Signature
(2) The number of offerees shall not be considered for the
purposes of this section.
(3) A husband and wife and their dependents, and an individual and
his or her dependents, shall be counted as one person.
(4) A retirement plan, trust, business trust, corporation, or
other entity that is wholly owned by an individual and the individual'
s spouse or the individual's dependents, or any combination thereof,
shall not be counted separately from the individual, but the
investments of these entities shall be aggregated with those of the
individual for the purposes of the statement required by paragraph
(1). If the investments of any entities are required to be aggregated
under this subdivision, the adjusted gross income or net worth of
these entities may also be aggregated with the net worth, income, or
both, of the individual.
(5) The "institutional investors" enumerated in subdivision (i) of
Section 25102 or subdivision (c) of Section 25104 of the
Corporations Code, or in a rule adopted pursuant thereto, shall not
be counted.
(6) A partnership, limited liability company, corporation, or
other organization that was not specifically formed for the purpose
of purchasing the security offered in reliance upon this exemption
from securities qualification is counted as one person.
(g) The notes or interests of the purchasers shall be identical in
their underlying terms, including the right to direct or require
foreclosure, rights to and rate of interest, and other incidents of
being a lender, and the sale to each purchaser pursuant to this
section shall be upon the same terms, subject to adjustment for the
face or principal amount or percentage interest purchased and for
interest earned or accrued. This subdivision does
shall not be construed to preclude different
selling prices for interests to the extent that these differences are
reasonably related to changes in the market value of the loan
occurring between the sales of these interests. The interest of each
purchaser shall be recorded pursuant to subdivisions (a) to (c),
inclusive, of Section 10234.
(h) (1) Except as provided in paragraph (2), the aggregate
principal amount of the notes or interests sold, together with the
unpaid principal amount of any encumbrances upon the real property
or mobilehome senior thereto, shall not exceed the
following percentages of the current market value of each parcel of
the real property or mobilehome , as determined in writing
by the broker or appraiser pursuant to Section 10232.6, plus the
amount for which the payment of principal and interest in excess of
the percentage of current market value is insured for the benefit of
the holders of the notes or interests by an insurer admitted to do
business in this state by the Insurance Commissioner:
(A) Single-family residence, owner occupied
........................................ 80%
(B) Single-family residence, not owner
occupied ............................... 75%
(C) Commercial and income-producing
properties ............................. 65%
(D) Single-family residentially zoned lot
or parcel which has
installed offsite improvements
including drainage, curbs,
gutters, sidewalks, paved roads, and
utilities as mandated
by the political subdivision having
jurisdiction over the lot
or parcel .............................. 65%
(E) Land that has been zoned for (and if
required, approved for
subdivision as) commercial or
residential development ................ 50%
(F) Other real property ....................
or other mobilehome
. 35%
(2) The percentage amounts specified in paragraph (1) may be
exceeded when and to the extent that the broker determines that the
encumbrance of the property in excess of these percentages is
reasonable and prudent considering all relevant factors pertaining to
the real property or mobilehome . However, in no event
shall the aggregate principal amount of the notes or interests sold,
together with the unpaid principal amount of any encumbrances upon
the property or mobilehome senior thereto, exceed 80
percent of the current fair market value of improved real property
or mobilehome or 50 percent of the current fair market
value of unimproved real property, except in the case of a
single-family zoned lot or parcel as defined in paragraph (1), which
shall not exceed 65 percent of the current fair market value of that
lot or parcel, plus the amount insured as specified in paragraph (1).
A written statement shall be prepared by the broker that sets forth
the material considerations and facts that the broker relies upon for
his or her determination, which shall be retained as a part of the
broker's record of the transaction. Either a copy of the statement or
the information contained therein shall be included in the
disclosures required pursuant to subdivision (l).
(3) A copy of the appraisal or the broker's evaluation, for each
parcel of real property or mobilehome securing the notes
or interests, shall be delivered to each purchaser. The broker shall
advise purchasers of their right to receive a copy. For purposes of
this paragraph, "appraisal" means a written estimate of value based
upon the assembling, analyzing, and reconciling of facts and value
indicators for the real property or mobilehome in
question. A broker shall not purport to make an appraisal unless the
person so employed is qualified on the basis of special training,
preparation, or experience.
(4) For construction or rehabilitation loans, the term "current
market value" may be deemed to be the value of the completed project
if the following safeguards are met:
(A) An independent neutral third-party escrowholder is used for
all deposits and disbursements.
(B) The loan is fully funded, with the entire loan amount to be
deposited in escrow prior to recording of the deed or deeds of trust.
(C) A comprehensive, detailed, draw schedule is used to ensure
proper and timely disbursements to allow for completion of the
project.
(D) The disbursement draws from the escrow account are based on
verification from an independent qualified person who certifies that
the work completed to date meets the related codes and standards and
that the draws were made in accordance with the construction contract
and draw schedule. For purposes of this subparagraph, "independent
qualified person" means a person who is not an employee, agent, or
affiliate of the broker and who is a licensed architect, general
contractor, structural engineer, or active local government building
inspector acting in his or her official capacity.
(E) An appraisal is completed by a qualified and licensed
appraiser in accordance with the Uniform Standards of Professional
Appraisal Practice (USPAP).
(F) In addition to the transaction documentation required by
subdivision (i), the documentation shall include a detailed
description of actions that may be taken in the event of a failure to
complete the project, whether that failure is due to default,
insufficiency of funds, or other causes.
(G) The entire amount of the loan does not exceed two million five
hundred thousand dollars ($2,500,000).
(5) If a note or an interest will be secured by more than one
parcel of real property or mobilehome , for the purpose of
determining the maximum amount of the note or interest, each
security property shall be assigned a portion of the note or interest
which shall not exceed the percentage of current market value
determined by, and in accordance with, the provisions of paragraphs
(1) and (2).
(i) The documentation of the transaction shall require that (1) a
default upon any interest or note is a default upon all interests or
notes and (2) the holders of more than 50 percent of the recorded
beneficial interests of the notes or interests may govern the actions
to be taken on behalf of all holders in accordance with Section
2941.9 of the Civil Code in the event of default or foreclosure for
matters that require direction or approval of the holders, including
designation of the broker, servicing agent, or other person acting on
their behalf, and the sale, encumbrance, or lease of real property
or a mobilehome owned by the holders resulting from
foreclosure or receipt of a deed in lieu of foreclosure. The terms
called for by this subdivision may be included in the deed of trust,
in the assignment of interests, or in any other documentation as is
necessary or appropriate to make them binding on the parties.
(j) (1) The broker shall not accept any purchase or loan funds or
other consideration from a prospective lender or purchaser, or
directly or indirectly cause the funds or other consideration to be
deposited in an escrow or trust account, except as to a specific loan
or note secured by a deed of trust that the broker owns, is
authorized to negotiate, or is unconditionally obligated to buy.
(2) All funds received by the broker from the purchasers or
lenders shall be handled in accordance with Section 10145 for
disbursement to the persons thereto entitled upon recordation of the
interests of the purchasers or lenders in the note and deed of trust.
No provision of this article shall be construed as modifying or
superseding applicable law regulating the escrowholder in any
transaction or the handling of the escrow account.
(3) The books and records of the broker or servicing agent, or
both, shall be maintained in a manner that readily identifies
transactions under this article and the receipt and disbursement of
funds in connection with these transactions.
(4) If required by paragraph (3) of subdivision (k), the review by
the independent certified public accountant shall include a sample
of transactions, as reflected in the records of the trust account
required pursuant to paragraph (1) of subdivision (k), and the bank
statements and supporting documents. These documents shall be
reviewed for compliance with this article with respect to the
handling and distribution of funds. The sample shall be selected at
random by the accountant from all these transactions and shall
consist of the following: (A) three sales made or 5 percent of the
sales made pursuant to this article during the period for which the
examination is conducted, whichever is greater, and (B) 10 payments
processed or 2 percent of payments processed under this article
during the period for which the examination is conducted, whichever
is greater.
(5) For the purposes of this subdivision, the transaction that
constitutes a "sale" is the series of transactions by which a series
of notes of a maker, or the interests in the note of a maker, are
sold or issued to their various purchasers under this article,
including all receipts and disbursements in that process of funds
received from the purchasers or lenders. The transaction that
constitutes a "payment," for the purposes of this subdivision, is the
receipt of a payment from the person obligated on the note or from
some other person on behalf of the person so obligated, including the
broker or servicing agent, and the distribution of that payment to
the persons entitled thereto. If a payment involves an advance paid
by the broker or servicing agent as the result of a dishonored check,
the inspection shall identify the source of funds from which the
payment was made or, in the alternative, the steps that are
reasonably necessary to determine that there was not a disbursement
of trust funds. The accountant shall inspect for compliance with the
following specific provisions of this section: paragraphs (1), (2),
and (3) of subdivision (j) and paragraphs (1) and (2) of subdivision
(k).
(6) Within 30 days of the close of the period for which the report
is made, or within any additional time as the commissioner may in
writing allow in a particular case, the accountant shall forward to
the broker or servicing agent, as the case may be, and to the
commissioner, the report of the accountant, stating that the
inspection was performed in accordance with this section, listing the
sales and the payments examined, specifying the nature of the
deficiencies, if any, noted by the accountant with respect to each
sale or payment, together with any further information as the
accountant may wish to include, such as corrective steps taken with
respect to any deficiency so noted, or stating that no deficiencies
were observed. If the broker meets the threshold criteria of Section
10232, the report of the accountant shall be submitted as part of the
quarterly reports required under Section 10232.25.
(k) The notes or interests shall be sold subject to a written
agreement that obligates a licensed real estate broker, or a person
exempted from the licensing requirement for real estate brokers under
this chapter, to act as agent for the purchasers or lenders to
service the note or notes and deed of trust, including the receipt
and transmission of payments and the institution of foreclosure
proceedings in the event of a default. A copy of this servicing
agreement shall be delivered to each purchaser. The broker shall
offer to the lenders or purchasers the services of the broker or one
or more affiliates of the broker, or both, as servicing agent for
each transaction conducted pursuant to this article. The agreement
shall require all of the following:
(1) (A) That payments received on the note or notes be deposited
immediately to a trust account maintained in accordance with this
section and with the provisions for trust accounts of licensed real
estate brokers contained in Section 10145 and Article 15 (commencing
with Section 2830.1) of Chapter 6 of Title 10 of the California Code
of Regulations.
(B) That payments deposited pursuant to subparagraph (A) shall not
be commingled with the assets of the servicing agent or used for any
transaction other than the transaction for which the funds are
received.
(2) That payments received on the note or notes shall be
transmitted to the purchasers or lenders pro rata according to their
respective interests within 25 days after receipt thereof by the
agent. If the source for the payment is not the maker of the note,
the agent shall inform the purchasers or lenders of the source for
payment. A broker or servicing agent who transmits to the purchaser
or lenders the broker's or servicing agent's own funds to cover
payments due from the borrower but unpaid as a result of a dishonored
check may recover the amount of the advances from the trust fund
when the past due payment is received. However, this article does not
authorize the broker, servicing agent, or any other person to issue,
or to engage in any practice constituting, any guarantee or to
engage in the practice of advancing payments on behalf of the
borrower.
(3) If the broker or person who is or becomes the servicing agent
for notes or interests sold pursuant to this article upon which the
payments due during any period of three consecutive months in the
aggregate exceed one hundred twenty-five thousand dollars ($125,000)
or the number of persons entitled to the payments exceeds 120, the
trust account or accounts of that broker or affiliate shall be
inspected by an independent certified public accountant at no less
than three-month intervals during the time the volume is maintained.
Within 30 days after the
close of the period for which the review is made, the report of the
accountant shall be forwarded as provided in paragraph (6) of
subdivision (j). If the broker is required to file an annual report
pursuant to subdivision (o) or pursuant to Section 10232.2, the
quarterly report pursuant to this subdivision need not be filed for
the last quarter of the year for which the annual report is made. For
the purposes of this subdivision, an affiliate of a broker is any
person controlled by, controlling, or under common control with the
broker.
(4) Unless the servicing agent will receive notice pursuant to
Section 2924b of the Civil Code, the servicing agent shall file a
request for notice of default upon any prior encumbrances and
promptly notify the purchasers or lenders of any default on the prior
encumbrances or on the note or notes subject to the servicing
agreement.
(5) The servicing agent shall promptly forward copies of the
following to each purchaser or lender:
(A) Any notice of trustee sale filed on behalf of the purchasers
or lenders.
(B) Any request for reconveyance of the deed of trust received on
behalf of the purchasers or lenders.
( l ) The broker shall disclose in writing to each
purchaser or lender the material facts concerning the transaction on
a disclosure form adopted or approved by the commissioner pursuant to
Section 10232.5, subject to the following:
(1) The disclosure form shall include a description of the terms
upon which the note and deed of trust are being sold, including the
terms of the undivided interests being offered therein, including the
following:
(A) In the case of the sale of an existing note:
(i) The aggregate sale price of the note.
(ii) The percent of the premium over or discount from the
principal balance plus accrued but unpaid interest.
(iii) The effective rate of return to the purchasers if the note
is paid according to its terms.
(iv) The name and address of the escrowholder for the transaction.
(v) A description of, and the estimated amount of, each cost
payable by the seller in connection with the sale and a description
of, and the estimated amount of, each cost payable by the purchasers
in connection with the sale.
(B) In the case of the origination of a note:
(i) The name and address of the escrowholder for the transaction.
(ii) The anticipated closing date.
(iii) A description of, and the estimated amount of, each cost
payable by the borrower in connection with the loan and a description
of, and the estimated amount of, each cost payable by the lenders in
connection with the loan.
(C) In the case of a transaction involving a note or interest
secured by more than one parcel of real property or mobilehome
, in addition to the requirements of subparagraphs (A) and (B):
(i) The address, description, and estimated fair market value of
each property securing the loan.
(ii) The amount of the available equity in each property securing
the loan after the loan amount to be apportioned to each property is
assigned.
(iii) The loan to value percentage for each property after the
loan amount to be apportioned to each property is assigned pursuant
to subdivision (h).
(2) A copy of the written statement or information contained
therein, as required by paragraph (2) of subdivision (h), shall be
included in the disclosure form.
(3) Any interest of the broker or affiliate in the transaction, as
described in subdivision (e), shall be included with the disclosure
form.
(4) When the particular circumstances of a transaction make
information not specified in the disclosure form material or
essential to keep the information provided in the form from being
misleading, and the other information is known to the broker, the
other information shall also be provided by the broker.
(5) If more than one parcel of real property or mobilehome
secures the notes or interests, the disclosure form shall also
fully disclose any risks to investors associated with securing the
notes or interests with multiple parcels of real property or
mobilehomes .
(m) The broker or servicing agent shall furnish any purchaser of a
note or interest, upon request, with the names and addresses of the
purchasers of the other notes or interests in the loan.
(n) No agreement in connection with a transaction covered by this
article shall grant to the real estate broker, the servicing agent,
or any affiliate of the broker or agent the option or election to
acquire the interests of the purchasers or lenders or to acquire the
real property or mobilehome securing the interests. This
subdivision shall not prohibit the broker or affiliate from acquiring
the interests, with the consent of the purchasers or lenders whose
interests are being purchased, or the property or mobilehome
, with the consent of the purchasers or lenders, if the consent
is given at the time of the acquisition.
(o) Each broker who conducts transactions under this article, or
broker or person who becomes the servicing agent for notes or
interest sold pursuant to this article, who meets the criteria of
paragraph (3) of subdivision (k) shall file with the commissioner an
annual report of a review of its trust account. The report shall be
prepared and filed in accordance with subdivision (a) of Section
10232.2 and the rules and procedures thereunder of the commissioner.
That report shall cover the broker's transactions under this article
and, if the broker also meets the threshold criteria set forth in
Section 10232, the broker's transactions subject to that section
shall be included as well.
(p) Each broker conducting transactions pursuant to this article,
or broker or person who becomes the servicing agent for notes or
interest sold pursuant to this article, who meets the criteria of
paragraph (3) of subdivision (k) shall file with the commissioner a
report of the transactions that is prepared in accordance with
subdivision (c) of Section 10232.2. If the broker also meets the
threshold criteria of Section 10232, the report shall include the
transactions subject to that section as well. This report shall be
confidential pursuant to subdivision (f) of Section 10232.2.
SEC. 5. Section 25102.5 of the
Corporations Code is amended to read:
25102.5. There shall be exempted from Section 25110 a transaction
that is the sale of a series of notes secured directly by an
interest in the same real property or mobilehome , or the
sale of undivided interests in a note secured directly by real
property or one or more mobilehomes equivalent to a series
transaction, that complies with all of the provisions of Article 6
(commencing with Section 10237) of Chapter 3 of Part 1 of Division 4
of the Business and Professions Code. For purposes of this section, a
real estate broker licensed by the Real Estate Commissioner of this
state who engages in the offer and sale of notes secured directly by
real property or mobilehomes of various makers, which are
a series of notes or notes in which undivided interests are offered
and sold, shall be deemed to be the issuer of these notes and
undivided interests if the notes of the various makers are offered
and sold pursuant to a plan or arrangement that is common to the
various makers with respect to documentation and loan standards and
that include provisions for servicing these notes on behalf of
purchasers.
SEC. 6. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.