Opinion No. (1999)

BILL LOCKYER Attorney General CLAYTON P. ROCHE Deputy Attorney General WILLIAM KENEFICK, ACTING COMMISSIONER OF CORPORATIONS, has requested an opinion on the following question: May a licensed residential mortgage lender charge the borrower interest from the date its funds are paid into escrow rather than from the date the funds are disbursed from escrow for the borrower's use? CONCLUSION A licensed residential mortgage lender may not charge the borrower interest from the date its funds are paid into escrow rather than from the date the funds are disbursed from escrow for the borrower's use. ANALYSIS In 1994, the Legislature enacted a comprehensive statutory scheme, the California Residential Mortgage Lending Act (Fin. Code, §§ 50000 - 50707 ; "Act"), operative January 1, 1996, to regulate the business of making residential mortgage loans. Persons conducting such business must obtain a license from the Commissioner of Corporations. (Fin. Code, § 50002 .) The Act authorizes licensees to engage in specified transactions (Fin. Code, § 50129 ), and expressly prohibits them from engaging in other activities (Fin. Code, § 50204 , subd. (i)). One prohibition is…