California's predatory lending restrictions under CFL §4970-4979.8 apply to loans secured by:
Correct Answer
B) The borrower's principal dwelling only
California's covered loan provisions apply specifically to loans secured by the borrower's principal dwelling, not all real property.
Why This Is the Correct Answer
California's covered loan provisions apply specifically to loans secured by the borrower's principal dwelling, not all real property.
Why the Other Options Are Wrong
Option A: Any real property
The restrictions don't apply to all real property — only the borrower's primary residence.
Option C: Commercial property
Commercial property loans are not covered by the predatory lending statute.
Option D: Vacant land
Vacant land loans are not subject to covered loan restrictions.
Memory Technique
CA -> ca-covered-loans-high-cost-consumer-protections
Exam Tip
Covered-loan questions often test the 8-point APR trigger, 6 percent points-and-fees trigger, principal-dwelling scope, Consumer Caution notice timing, ATR, prepayment penalty limits, prohibited loan terms, and remedies.
Common Mistakes to Avoid
- -Using a national baseline answer when California has agency-specific DFPI or DRE requirements
- -Confusing CFL, CRMLA, covered-loan, usury, servicing, and DRE endorsement rules
- -Relying on legacy California state-exam or education assumptions instead of current NMLS source pages
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