2842. Approved Borrower Disclosure Statement for Nontraditional and Subprime Mortgage Products.
(a) Notwithstanding Section 2840 of these regulations, the Commissioner shall publish and make available to interested
persons as an official form of the Bureau of Real Estate Form RE 885 (Rev. 8/08) which is incorporated by reference,
with approved format and content for the disclosure statement referred to in subdivision (a) of Section 10240 of the
Code and Section 10241 of the Code.
(b) The publication of the form pursuant to subdivision (a) hereof is for the purpose of aiding real estate licensees in
providing the disclosure of material information in a uniform and effective manner to prospective borrowers relating to
home loans on one-to-four unit single-family residences whose loans involve a “nontraditional mortgage product” as
that term is defined in subsection (c) below.
(c) For the purpose of this regulation, a “nontraditional mortgage product” is a loan that allows borrowers to defer
repayment of principal or interest. Such products include, but are not limited to, interest only loans where a borrower
pays no loan principal for a period of time and payment option loans where one or more of the payment options may
result in negative amortization.
A “nontraditional mortgage product” does not include reverse mortgages or home equity lines of credit (other than
simultaneous second lien loans).
(d) A real estate broker must obtain the prior written approval of the Commissioner if he/she wishes to use a form
different than that referred to in subsection (a) above with a nontraditional mortgage product. Forms that do not
adequately provide the information required by Sections 10240 and/or 10241 of the Code, as appropriate, and in a
format that is easily used by the Bureau, will not be approved.
2842.5. Completed Written Loan Application
For purposes of Section 10240 of the Code, a loan application shall be considered complete when the licensee receives
or has prepared a written application on an application form or forms normally used by the lender for a Federally Related
Mortgage Loan, and as to non-federally related mortgage loans, when the licensee receives or has prepared a written
application on an application form or forms normally used by a lender or the licensee.