A California real estate broker arranges a loan between a private investor and a borrower, secured by the borrower's primary residence. The interest rate is 14%. Is this loan usurious?
Correct Answer
C) No, because the real estate broker exemption applies to broker-arranged loans secured by real property
The real estate broker exemption under Article XV applies when a licensed real estate broker arranges a loan secured by real property. There is no distinction between residential and commercial property for this exemption, so the 14% rate is permissible.
Why This Is the Correct Answer
The real estate broker exemption under Article XV applies when a licensed real estate broker arranges a loan secured by real property. There is no distinction between residential and commercial property for this exemption, so the 14% rate is permissible.
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