Under California Financial Code section 4970, which points-and-fees threshold can cause a mortgage loan to be classified as a California covered loan?
Correct Answer
C) More than 6% of the total loan amount
California defines a covered loan to include a qualifying consumer loan where total points and fees payable by the consumer at or before closing exceed 6% of the total loan amount. The 6% figure is the covered-loan trigger, not a blanket maximum fee for every covered loan.
Why This Is the Correct Answer
California defines a covered loan to include a qualifying consumer loan where total points and fees payable by the consumer at or before closing exceed 6% of the total loan amount. The 6% figure is the covered-loan trigger, not a blanket maximum fee for every covered loan.
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