CA SAFE Flashcards
What are the two laws that regulate mortgage licensees?
California Finance Lenders Law and California Residential Mortgage Lending Act
How many hours of pre-licensing education is required?
20 hours
How many hours of pre-licensing education is devoted to California-specific law?
2 hours
Who is the state regulator for Florida?
California Department of Business Oversight (DBO)
What two divisions fall under the Department of Business Oversight?
Department of Corporations and Department of Financial Institutions
Who heads the DBO?
The Commissioner
Who regulates banks, credit unions, and money transmitters
Division of Financial Institutions
Who regulates mortgage lenders, finance lenders, and MLOs?
Division of Corporations
What Division of the Financial Code can the Finance Lenders Law be found?
Division 9
Chapter One of the Finance Lenders Law describes what?
Licensing requirements and exemptions
Chapter Two of the Finance Lenders Law describes what?
Relevant to consumer loans
Chapter Three of the Finance Lenders Law describes what?
Relevant to commercial loans
Chapter Four of the Finance Lenders Law describes what?
Covers license revocation/suspension and penalties for violations
What are some of the purposes of the Finance Lenders Law?
- Ensure adequate supply of credit to borrowers
- Simplify, clarify, and modernize the law governing loans made by finance lenders
- Foster competition among finance lenders
- Protect borrowers from unfair practices
What Division of the California Financial Code can the Residential Mortgage Lending Act be found?
Division 20
The California Residential Mortgage Lending Act applies to who?
Non-depository lenders and loan services and to the MLOs they employ
The California Finance Lenders Law applies to who?
Regulates the lending activities of finance lenders and brokers
What are some examples of exemptions for an MLO license?
- An individual who performs administrative or clerical tasks only
- An individual who renegotiates terms for an existing mortgage loan
- An individual solely involved in extensions of credit related to timeshare plans
What are some examples of exemptions for a Residential Mortgage Lending Act license?
- A depository institutions
- An agency of the federal, state, or municipal government
- A person acting in a fiduciary capacity conferred by the authority of a court
What are some examples of exemptions for a Finance Lenders Law license?
- A check casher holding a valid permit
- College financial aid/scholarship
- A broker-dealer
MU1 Form
Identifies information about the entity’s executive officers and owners and info regarding criminal actions against the entity
MU2 Form
Biographical statement of each individual designated as a control person and info regarding criminal action
MU3 Form
Branch offices
MU4 Form
Applicants for MLO licenses, info and disclosures
Licensure for MLO fees
- Application fee - $330
- Criminal Background Check fee - $36.25
- Credit Report fee - $15
Sponsorship Request
MLOs must be sponsored by one company, the employer
An applicant may be denied a license if their personal history includes what?
- Any liens or judgments for fraud, misrepresentation, dishonest dealing, or mishandling of trust funds
- Other liens, judgments, or financial or professional conditions that indicate a pattern of dishonesty
Licensure under the Finance Lenders Law fees
Application fee - $400
How many days prior to conducting business in a new location must licensees submit an application for a branch office?
10 days prior
Who approves or denies applications for branch offices?
The Commissioner
What is the maximum amount of days the Commissioner can render a decision regarding an application for a branch office?
90 days
If the Commissioner denies the person chosen to oversee lending activity at a new branch office, how many days does the licensee have to submit a new application?
10 days
What must an individuals net worth be at a minimum?
$25,000
For a licensed finance lender or broker that makes residential mortgage loans and employs one or more MLOs, their net worth must be what?
$250k
For a licensed finance broker that arranges but does not make residential mortgage loans and employs one or more MLOs, their net worth must be what?
$50k
What is the minimum amount of surety bond? (general)
$25k
Under the Finance Lenders Law, how many days must a new bond be filed?
Within 10 days after payment on the existing bond or within 10 days after the Commissioner notifies the licensee of the need for a new bond
Licensure under the Residential Mortgage Lending Act fee
Application fee - $1,100
Under the RMLA, how many days must licensees submit their MU3 form before engaging business at a new branch location?
10 days
Statement of Financial Solvency
Must be submitted by applicants, demonstrates satisfaction of the net worth requirements