A broker who earned a fee arranging a purchase loan in 2024 now negotiates a refinance of it for the same borrower at 13%. Does the broker-arranged exemption necessarily require a new fee when the refinance is connected to the compensated prior transaction?
Correct Answer
B) Arranged: the exemption reaches a refinance connected to the earlier work
Section 1916.1 treats a broker as having arranged a forbearance, extension, modification or refinance negotiated for another in connection with a prior transaction where the broker was compensated for real estate services. Other choices: the exemption is not confined to the first loan; a fresh fee is not required where the connection exists; and the identity of the lender is not the test. Source: Cal. Civ. Code § 1916.1
Why This Is the Correct Answer
Section 1916.1 treats a broker as having arranged a forbearance, extension, modification or refinance negotiated for another in connection with a prior transaction where the broker was compensated for real estate services. Other choices: the exemption is not confined to the first loan; a fresh fee is not required where the connection exists; and the identity of the lender is not the test. Source: Cal. Civ. Code § 1916.1
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