Loan Estimate Challenges
California’s Biggest LE Challenges

California has built a reputation as a heavily regulated state with a  complex system of laws and rules, no matter what part of the economy or society being discussed. So it’s probably no surprise to learn that, when it comes to property fees, taxes and other influences on creating an accurate Loan Estimate and closing, California is one of the trickier places in which to do it.

California: A state of varying county and city transfer taxes

In California, there are a myriad of differing county-specific and city-specific transfer taxes. Alameda County, especially, stands out for its city-specific transfer taxes which are updated independently, at different times and in varying rates and amounts. While the changes tend to impact the seller-side of the transaction, that’s not always true. 

Los Angeles County, in particular, can be an expensive locale in which to err when it comes to taxes and fees, and it has its own, specific recording fees.

The Affordable Housing Fee

And then there’s the Affordable Housing Fee, known as “SB 2.” SB 2 includes a surcharge of $75 per document. And while there are some exemptions, they’re not simple, and if not applied correctly, can lead to that $75 fee (up to a maximum of $225).

The Real Estate Fraud Prosecution Trust Fund Fee

California is also the home of the real estate fraud prosecution trust fund fee, which was created for a fairly self-evident reason. There are some exemptions available here as well.


Finally, one can’t forget the Preliminary Change of Ownership Forms (PCOR) when preparing a transaction in California. Keep in mind that, if this form is filed when the deed is recorded, there’s an applicable discount. But if that’s not the case, there’s yet another fee to be applied.



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