Financing
Approximately 9 percent of the broker examination. California is a deed-of-trust state with a mature body of anti-deficiency and foreclosure law, and Article 7 of the Real Estate Law adds broker-specific limits when a licensee arranges a loan secured by a dwelling.
The instruments and the parties
A California loan is normally evidenced by a promissory note and secured by a deed of trust, which has three parties: the trustor who borrows, the beneficiary who lends, and the trustee who holds bare legal title with a power of sale. The trustee's power of sale supports non-judicial foreclosure, which is faster than judicial foreclosure and produces no deficiency judgment. Civil Code section 2924c gives the trustor the right to reinstate by curing the default up to five business days before the sale, and no sale date may be set until roughly ninety days after the notice of default is recorded.
Anti-deficiency and one-action rules
Code of Civil Procedure section 580b bars a deficiency after foreclosure of a seller carryback or of a purchase-money loan on an owner-occupied dwelling of not more than four units. Section 580d bars a deficiency after a non-judicial trustee's sale. Section 726 is the one-action rule: a secured creditor must exhaust the security in a single action before pursuing the debtor personally. A junior lienholder whose security is wiped out by a senior sale becomes a sold-out junior and may sue on the note unless section 580b protects the borrower.
The broker as loan broker: Article 7
Business and Professions Code section 10240 requires a broker who negotiates a loan secured by real property to deliver the mortgage loan disclosure statement within three business days after receiving a completed written loan application or before the borrower becomes obligated, whichever comes first, and to keep a signed copy for three years. Section 10242 caps commissions and costs on the smaller loans the article covers, and section 10245 lifts those caps once a first trust deed reaches $30,000 or a junior trust deed reaches $20,000. Section 10243 limits an exclusive loan-negotiation agreement to 45 days, section 10242.5 caps a late charge at 10 percent of the installment with a $5 minimum and no charge if payment arrives within 10 days, and sections 10085.5 and 10085.6 forbid advance fees for loan brokerage before the borrower is obligated and forbid any advance fee at all for a mortgage loan modification.
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State-specific details
State exam facts
- State regulator
- California Department of Real Estate (DRE)
- Prelicensing education
- 8 statutory college-level real estate courses
- Passing score
- 75%
- Scored questions
- 200
- Time limit
- 240 minutes
Who regulates real estate brokers in California?
The California Department of Real Estate (DRE) licenses and regulates real estate brokers and salespersons. Unlike most states, the DRE develops and administers the broker exam itself at its own electronic exam sites rather than contracting with PSI or Pearson VUE.
What experience do I need before the California broker exam?
Broker applicants must show at least two years of full-time licensed salesperson experience within the prior five years, or an equivalent qualifying background — for example, a four-year college degree with a major or minor in real estate. Experience is documented on the DRE's Broker Experience form.
How is the California broker exam structured?
The California broker examination is a single 200-question multiple-choice test given over 4 hours (one 4-hour session). A score of 75% or higher is required to pass. Applicants must also complete eight statutory college-level real estate courses before qualifying.
Sources: https://www.dre.ca.gov/examinees/brokerexperience.html, https://www.dre.ca.gov/examinees/TakingExam.html
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