California mortgage brokers must be licensed real estate brokers. 

These loan brokers are governed by Article 7: Real Property Loans of the California Business and Professions Code. According to California law, the broker must make certain that the borrower receives a completed loan disclosure statement within three business days of receiving a completed loan application or prior to the signing of any loan documents. 

The form for making this disclosure is called the Mortgage Loan Disclosure Statement. 

It details the total costs of a loan to the borrower, including data regarding interest rate, balloon payments, security documents, and costs and commissions to the loan broker. 

Loan brokers also have some restrictions to follow. They are limited in what they can charge for commissions and expenses associated with securing a loan. 

These limits apply only to first trust deeds of under $30,000 or second trust deeds of under $20,000.  

The maximum commission amounts allowed for the loan amounts indicated above are:

• First mortgages – 5 percent of the principal for loans of less than 2 years; 5 percent for loans of more than 2 years but less than 3; 10 percent for loans of 3 years or more
• Second mortgages – 5 percent of the principal for loans of less than 2 years; 10 percent for loans of more than 2 years but less than 3; 15 percent for loans of 3 years or more 

Fees for making the loan (such as appraisals, title charges, recording fees, etc.) cannot exceed 5 percent of the principal or $390, whichever is greater. 

Regardless of the size of the loan, the broker may charge the borrower only the actual costs and expenses paid, not to exceed $700.