California Financial Code

§ 7509

FIN § 7509 Effective Jan 1, 2007Div. 2 · Ch. 6 · Art. 6

Statute text

(a)(1) At the time of origination, a real estate loan may not exceed 100 percent of the market value of security property. An association shall, by vote of its board of directors, establish maximum loan-to-value ratios for loans made on the security of real estate, and the resolution adopting those ratios shall be included in the minutes of the directors’ meeting. Home loans, as defined in Section 7504, made on the combined security of real estate and savings accounts may be made in excess of the maximum loan-to-value ratios adopted pursuant to this subdivision with the excess secured by the savings account.

(2)However, for loans originated in excess of 90 percent of the initial appraised value of the security property, the savings account shall consist only of funds belonging to the borrower, the borrower’s family, or the borrower’s employer, and the loans shall not exceed the appraised value of the real estate.

(b)With respect to home loans originated or refinanced in excess of 90 percent of the appraised value of the security property, that part of the unpaid balance that exceeds 80 percent of the property value shall be insured or guaranteed by a mortgage insurance company that the Federal Home Loan Mortgage Corporation has determined to be a “qualified private insurer.”

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Legislative history

Amended by Stats. 2006, Ch. 538, Sec. 169. Effective January 1, 2007.