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TITLE 2. CREDIT SALES
CHAPTER 1. RETAIL INSTALLMENT SALES
Article 7. Refinancing and Consolidation
California Civil Code Section 1807.1-1807.3




1807.1.  (a) The holder of a retail installment contract may, upon
agreement with the buyer, extend the scheduled due date or defer the
scheduled payment of all or of any part of any installment or
installments payable thereunder.  No charge shall be made for any
such extension or deferment unless the agreement for such extension
or deferment is in writing and signed by the parties thereto.
   (b) Where the contract includes a finance charge determined on the
precomputed basis, the holder may charge and contract for the
payment of an extension or deferral agreement charge by the buyer and
collect and receive the same, but such charge may not exceed an
amount equal to 1 percent per month simple interest on the amount of
the installment or installments, or part thereof, extended or
deferred for the period of extension or deferral. Such period shall
not exceed the period from the date when such extended or deferred
installment or installments, or part thereof, would have been payable
in the absence of such extension or deferral, to the date when such
installment or installments, or part thereof, are made payable under
the agreement of extension or deferment; except that a minimum charge
of one dollar ($1) for the period of extension or deferral may be
made in any case where the extension or deferral agreement charge,
when computed at such rate, amounts to less than one dollar ($1).
   (c) Where the contract includes a finance charge determined on the
simple-interest basis, the holder may charge and contract for the
payment of an extension or deferral agreement charge by the buyer and
collect and receive the same, but the charge for the extension or
deferral agreement may not exceed the lesser of twenty-five dollars
($25) or 10 percent of the then unpaid balance of the contract.  Such
charge shall be in addition to any finance charges which accrue
because such extended or deferred payments are received at a time
other than as originally scheduled.
   (d) An extension or deferral agreement may also provide for the
payment by the buyer of the additional cost to the holder of the
contract of premiums for continuing in force, until the end of such
period of extension or deferral, any insurance coverages provided for
in the contract, subject to the provisions of Section 1803.5.



1807.2.  The holder of a retail installment contract or contracts
may, upon agreement in writing with the buyer, refinance the
remaining amount owing on the contract or contracts by providing for
a new schedule of installment payments.  The holder may charge and
contract for the payment of a refinance charge by the buyer and
collect and receive the same, but such refinance charge shall be
based upon the amount refinanced, plus any additional cost of
insurance and of official fees incident to the refinancing, after the
deduction of a refund credit in an amount equal to that to which the
buyer would have been entitled under Section 1806.3 if he or she had
prepaid in full his or her obligations under the contract or
contracts.  The agreement for refinancing may also provide for the
payment by the buyer of the additional cost to the holder of the
contract or contracts of premiums for continuing in force, until the
maturity of the contract or contracts as refinanced, any insurance
coverages provided for therein, subject to Section 1803.5.  The
refinancing agreement shall set forth:
   (a) The amount of the existing outstanding balance to be
refinanced, which consists of the remaining amount owing to be
refinanced.
   (b) The amount of any refund credit.
   (c) The difference between subdivisions (a) and (b), which is the
net outstanding balance to be refinanced.
   (d) Any additional cost of insurance and of official fees to the
buyer.
   (e) The sum of subdivisions (c) and (d), which is the amount
financed.
   (f) The finance charge (1) as expressed as the annual percentage
rate as defined in Regulation Z and (2) expressed in dollars.
   (g) The number amount, and due dates or periods of payments
scheduled to repay the indebtedness and the sum of those payments.
   The items need not be stated in the sequence or order set forth
above; additional items may be included to explain the computations
made in determining the amount to be paid by the buyer.  Where there
is a consolidation of two or more contracts then Sections 1808.1 and
1808.2 shall apply.  If the finance charge or any portion thereof is
calculated on the 365-day basis, the amount of the finance charge
shown pursuant to subdivision (f) shall be that amount which will be
incurred by the buyer if all payments are received by the seller on
their respective due dates.



1807.3.  (a) If any payment, other than a deferred downpayment,
under a contract or refinancing agreement is more than twice the
amount of an otherwise regularly scheduled equal payment, the
contract or refinancing agreement shall contain the following
provision:     "The payment schedule contained in this contract
requires that you make a balloon payment of     $    (Amount of
balloon payment) which is a payment more than double the amount of
the regular payments.  You have an absolute right to obtain a new
payment schedule if you default in the payment of any balloon
payment."
   (b) If the buyer defaults in the payment of any balloon payment,
he or she shall be given an absolute right to obtain a new payment
schedule.  Unless agreed to by the buyer, the periodic payments under
the new schedule shall not be substantially greater than the average
of the preceding installments.

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