A California mortgage broker is reviewing a $250,000 consumer mortgage secured by the borrower's principal dwelling. Which points-and-fees result would trigger California covered-loan status under Financial Code section 4970?
Correct Answer
B) Points and fees exceeding 6% of the total loan amount
California covered-loan status can be triggered when total points and fees payable by the consumer at or before closing exceed 6% of the total loan amount. For a $250,000 example, 6% is $15,000. The prior legacy percentage answer was wrong.
Why This Is the Correct Answer
California covered-loan status can be triggered when total points and fees payable by the consumer at or before closing exceed 6% of the total loan amount. For a $250,000 example, 6% is $15,000. The prior legacy percentage answer was wrong.
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