20250SB__138099INT INTRODUCED 2026-02-20 2025 SB INT Introduced by Senator Choi LEAD_AUTHOR SENATE Choi

An act to amend

Section 2923.1 of the Civil Code, relating to mortgages and deeds of trust. mortgages and deeds of trust Mortgage brokers. Existing law defines mortgage brokers, provides that a mortgage broker who provides brokerage services to a borrower is a fiduciary of that person, and makes a violation of the broker’s fiduciary duties to that person a violation of the broker’s license law. This bill would make nonsubstantive changes to those provisions. MAJORITY NO NO NO NO NO NO NO NO NO NO The people of the State of California do enact as follows:

SECTION

Section 2923.1 of the Civil Code is amended to read: 2923.1. (

a) A mortgage broker providing mortgage brokerage services to a borrower is the fiduciary of the borrower, and a violation of the broker’s fiduciary duties shall be a violation of the mortgage broker’s license law. This fiduciary duty includes a requirement that the mortgage broker place the economic interest of the borrower ahead of the broker’s own economic interest. A mortgage broker who provides mortgage brokerage services to the borrower owes this fiduciary duty to the borrower regardless of whether the mortgage broker is acting as an agent for any other party in connection with the residential mortgage loan transaction. (

b) For purposes of this section, the following

definitions apply: (1) “Licensed person” means a real estate broker licensed under the Real Estate Law (Part 1 (commencing with

Section 10000) of Division of the Business and Professions Code), a finance lender or broker licensed under the California Financing Law (Division 9 (commencing with

Section 22000) of the Financial Code), a residential mortgage lender licensed under the California Residential Mortgage Lending Act (Division 20 (commencing with

Section 50000) of the Financial Code), a commercial or industrial bank organized under the Financial Institutions Law (Division 1 (commencing with

Section 99) of the Financial Code), a savings association organized under the Savings Association Law (Division 2 (commencing with

Section 5000) of the Financial Code), and a credit union organized under the California Credit Union Law (Division 5 (commencing with

Section 14000) of the Financial Code). (2) “Mortgage broker” means a licensed person who provides mortgage brokerage services. For purposes of this section, a licensed person who makes a residential mortgage loan is a “mortgage broker,” and subject to the requirements of this

section applicable to mortgage brokers, only with respect to transactions in which the licensed person provides mortgage brokerage services. (3) “Mortgage brokerage services” means arranging or attempting to arrange, as exclusive agent for the borrower or as dual agent for the borrower and lender, for compensation or in expectation of compensation, paid directly or indirectly, a residential mortgage loan made by an unaffiliated third party. (4) “Residential mortgage loan” means a consumer credit transaction that is secured by residential real property that is improved by four or fewer residential units. (

c) The duties set forth in this

section shall not be construed to limit or narrow any other fiduciary duty of a mortgage broker.