California Business and Professions Code

§ 10241.4

BPC § 10241.4 Effective Jan 1, 1995Div. 4 · Part 1 · Ch. 3 · Art. 7

Statute text

(a)Prior to a borrower becoming obligated on any loan secured by a dwelling that provides for a balloon payment and is otherwise subject to Section 10240, if any agreement includes a promise, representation, or similar undertaking to extend or seek the extension of the term of the loan or refinancing of the loan, and the undertaking is not set forth in the promissory note evidencing the loan or in a rider to that note, the undertaking shall be in writing and the notice required by this section shall be provided to the borrower.

(b)The notice required by subdivision (a), shall state in at least 10-point boldface capitalized type: “AS THIS LOAN PROVIDES FOR A BALLOON PAYMENT, SEE THE MORTGAGE LOAN DISCLOSURE STATEMENT/GOOD FAITH ESTIMATE FOR IMPORTANT INFORMATION ON BALLOON PAYMENTS. ALSO, REFER TO THE LOAN DOCUMENTS AND THIS EXTENSION AGREEMENT FOR YOUR SPECIFIC RIGHTS AND OBLIGATIONS.”

(c)The notice shall also contain, in at least 10-point boldface capitalized type, either of the following statements depending upon which statement best describes the nature of the undertaking:

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Legislative history

Added by Stats. 1994, Ch. 86, Sec. 1. Effective January 1, 1995. Operative July 1, 1995, by Sec. 2 of Ch. 86.