ContractsIntermediateCalifornia Exam

Under California law, a real estate licensee who acts as a loan broker in a transaction must provide the borrower with a:

AListing agreement, as typically drafted in a residential purchase agreement
BMortgage Loan Disclosure Statement (MLDS)Correct
CTransfer Disclosure Statement, consistent with common contract law principles
DAgency confirmation form, per standard contingency and disclosure practice

Why Mortgage Loan Disclosure Statement (MLDS) Is Correct

Answer B: Mortgage Loan Disclosure Statement (MLDS)

Under Business and Professions Code §10240, a real estate licensee acting as a mortgage loan broker must provide the borrower with a Mortgage Loan Disclosure Statement (MLDS) before the borrower becomes obligated on the loan, disclosing all costs and terms.

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

Key Contracts Terms in This Question

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