CA test Flashcards
When can impound account be required?
State/ federal authority requires it
Loan is made, guaranteed, insured by state/ fed govt
Failure to pay 2 consecutive tax pymts
Orig loan principal is 90% or more of sales price, 90% or more of appraisal or combined loans is 80% or more or appraisal
Funds in account will earn interest of at least X% per annum
2%
Mortgage pymts must be more than X days late to be considered late pymt
10 days
Mortgagee needs to provide annual statement within X days after end of calendar yr
60 days
Late pymts chg may not exceed higher of X% of pymt due or $X
6% or $5
No prepayment penalties if loan executed more than X yrs ago
5 yrs
Prepayment penalty allowed for amt in excess of X% of orig loan balance
20%
Prepayment penalty can be X mths advance interest on balance beyond 20%
6 mths
If balloon payment is coming due, must notify borrower between X and X days
90-150 days
Yr of Holden Credit Denial Act
1976
Violation of Holden can result in?
Actual damages plus punitive up to $10k
Which act specifies X day notification for acceptance/ denial of credit?
30 days, Holden
What does DRE require to satisfy Respa?
Fed GFE + Mortgage Loan Disclosure Stmt DRE Form 882
What does DRE require to satisfy Respa for non-tradtl loans?
DRE Form 885 + Fed GFE
Which form has Comparison of Sample Mortgage Features
DRE Form 885
Covered loan has APR that exceeds the yield on Treasury securities by more than X%
8%
Covered loan has ttl pts and fees payable by consumer greater than X% of loan amt
6%
Covered loan cannot have prepayment penalty after X mths
36 mths
Max prepayment penalty on a covered loan
6 mths prepaid interest on amt in excess of 20% of loan
On covered loan, balloon pymts prohibited for loan terms of X yrs or less, exception is what?
5 yrs, bridge loans
Covered loan debt-to-income threshold
55%
Violations of covered loan law that were not willful need to be corrected within X days
45 days
Willful violation of covered loan law can result in license suspension of X mths to X yrs
6 mths to 3 yrs
2nd violation of covered loan law
Permanent revocation of license or 3 yr license sanction, $2500 fine per violation
Violation of covered loan law
Liable to consumer for $15k or actual damages
Max points, fees that can be financed in covered loan
$1k or 6% of orig loan balance
Acceptance of advance fees can result in fines up to $X, jail term up to X mths, or for corporation $x
Acceptance of advance fees can result in fines up to $10k, jail term up to 6 mths, or for corporation $50k
RE brokers are allowed to keep up to $X of their own money in trust accounts
$200
If RE broker is paid from proceeds of trust account, must withdraw their payment within X days so it isn’t considered co-mingling
25 days
Broker must place funds accepted on behalf of another in correct place within X days of receipt
3 business days
Cumulative records required for trust fund mgmt
Date rcvd From whom Amt Date of deposit into trust acct or date forwarding Date/ amt of disbursement Daily balance of acct
How long does it take CA Corporations Commission to deny/ approve MLO application?
60 calendar days
Lender has X days to pay annual assessment fee levied by Commissioner
20 days from receipt
To be in compliance with California law, lenders may contract for and receive from a borrower a delinquency fee for making late payments but are limited to a maximum of $_____ if the payment is at least 10 days past due and a maximum of $_____ if the payment is 15 days or more past due.
$10 / $15
Maximum civil fine
$25k per incidence
Application fee for new branch location
$200
Which legislation was passed to ensure California is in compliance with the mortgage loan originator licensing requirements of the federal S.A.F.E. Act laws?
Senate Bill 36 (SB36)
After failing to file a required report with Commissioner, Commissioner can issue order suspending license within X days
30 days
Mortgage lenders must retain records of mortgage loans originated for a period of ___ after the final payment is made on the mortgage loan issued.
3 years
When the Commissioner takes action to revoke or suspend a license and sends written notice of the impending order, the licensee has X days to file a written request for a hearing.
Within 15 days of the mailing, the licensee may file a written request for a hearing.
Who prosecutes all violations of California Real Estate law?
DA
A mortgage loan originator who fails to maintain a valid license endorsement for a period of X years or longer or who fails to register as a mortgage loan originator in accordance with applicable California law must retake the qualified written test.
5 years
If the Commissioner has conducted an audit which reflects commingling or conversion of trust funds in excess of $X, the court may enter an order restraining the licensee from engaging in the loan business pending further order of the court, provided that a hearing will be held on the order within X days on the matter.
$10k, 5 days
License endorsements are valid for a period of one year and expire annually on X
12/31
After hearing, if Commissioner moves forward with final suspension order, licensee has X days to commence action to refrain the enforcement of order
10 days
The maximum amount of civil penalty for each act or omission that results in a violation is $X
$25K
The maximum administrative fine for each violation may be up to $X per violation.
$2,500
“mortgage loan servicing activity” means receiving more than______installment payments of principal, interest, or other amounts placed in escrow
3
must notify the Commissioner of a bankruptcy petition filed by the licensee within X days of the filing
5 days
An unlicensed person acting as a mortgage broker or lender is subject to a fine for each transaction of unlicensed operation.
1111
Mortgage brokers must retain their original compensation contract for X years.
3 years
On or before the X in each year, the Commissioner shall notify each licensee by mail of the amount assessed and levied against it and that amount must be paid within X days. If payment is not made within X days, the Commissioner will assess and collect a penalty, in addition to the assessment of X
9/30, 30 days, 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
Failure to notify the California DRE or obtain a real estate license endorsement will result in a penalty of
$50/ day first 30 days then $100/ day up to $10k
A real estate broker who fails to notify the Department or who fails to obtain the required license endorsement can be assessed a penalty of $50 per day for each day written notification has not been received or a license endorsement has not been obtained, up to and including the 30th day after the first day of the assessment penalty. On and after the 31st day, the penalty increases to $100 per day, not to exceed a total penalty of $10,000, regardless of the number of days
Failure to notify Commissioner of new branch
$100/ day for first 10 days, then $10/ day
Application fee to open an additional branch location
$200
MLO license fee, breakdown
$169 - $100 license, $39 fingerprint, $30 NMLS
Fee for using an unapproved location
$500
Fee for not pulling an ad when ordered to do so
$500
Fee to become Mortgage Lender
$900 + $100 investigation fee
Maximum CRMLA assessment
$5000
Which division of the California Department of Corporations is responsible for the regulation of mortgage lenders and certain fiduciaries
Financial Division
Which division of DOC is responsible for the uniform administration of the Commissioner’s statutory authority and for the formulation of policy for the Department
Executive Office
Which division of DOC is responsible for responsible for the qualification of the offer and sale of securities and the licensing and regulation of broker-dealers, broker-dealer agents, investment advisers, and investment adviser representatives
Securities Regulation Division
Which division of DOC is responsible for enforcing the laws under the Investment and Lender-Fiduciary Programs administered by the Department of Corporations
Enforcement Division
If written notice is not provided at least 10 days prior to the change or notice is not given at least 10 days prior to engaging in business at a new location, the Commissioner may assess
$500 civil or administrative penalty
If a finance lender licensee seeks to change its place of business, the licensee must provide notice to the Commissioner when? The Commissioner will notify the licensee within XX if the change is disapproved.
at least 10 days prior to the change
10 days
If a MLO fails to file a required report with the Commissioner, the Commissioner may issue an order suspending the MLO’s license XX days after the date the mortgage loan originator failed to file the required report.
30 days
Finance lender net worth and surety bond requirements
$25K net worth
Employing one or more MLO requires $250K net worth
How long does loan application log need to be maintained?
3 yrs
What does loan application log have in it?
Application Date, Borrower Name, Property Address, Loan Amount, Terms, Loan Program, Loan Officer, and if closed, the disposition of the loan and its servicing.
Every licensed mortgage lender must file an annual audit report when?
Within 105 days of end of business fiscal year
If Commissioner investigates lender/ broker and charges for travel and expenses, how long do they have to pay?
30 days after presentation of itemized statement
In order to revoke or suspend a license, the Commissioner must provide the licensee a written notification of intent to issue a final order. The licensee has X days to request a hearing.
15 days
A certified copy of the corporate resolution and Certification (Assignment of Supervisory Responsibility) (RE 210) must be forwarded to DRE within X days after the adoption or modification thereof if such supervisory responsibility has been delegated from designated broker officer to other licensed broker officers
5 days
CRMLA -Annual report for calendar yr is required by X
Mar 1
CRMLA fine for filing annual report late
Once 10 days past due, fine is $100 per day for 10 days, then grounds for suspension/ revocation
Holden Act reporting requirements due when?
Mar 31
What does DRE Recovery Fund provide for?
$20k single act, $100k per licensee
Does DRE require CA residency?
No
The penalty for failing to obtain the MLO endorsement?
$50 per day for the first 30 days and $100 per day thereafter, not to exceed $10,000
NMLS&R form for an application for a license for everyone
MU4
NMLS&R form for an application for a Company business license
MU1
NMLS&R form for an application for a Officers of a Corporation
MU2
NMLS&R form for an application for a NMLS&R branch office application
MU3
If your application is deficient you have X days to correct
90 days
If there is a material change to your application information, notify DOC or DRE within ________ days.
20 days
A licensee may apply to renew a NMLS license endorsement in ________ and ________ for the next year.
November and December
A broker must provide information about a new associate to NMLS&R within ________ days.
5 days
If you fail to renew your NMLS endorsement, you have until ________ to request reinstatement.
Mar 1st
The Endorsement fee for a DRE salesperson is ________ plus the ________ NMLS fee.
$300, $60
A broker who starts “making” loans must notify DRE by Form 866 within
30 days
Enforcement of the California Code is covered by
Administrative Procedures Act
DOC loan originator license that is not renewed by December 31st expires ______________ the next year.
Jan 31st
If a licensee fails to maintain the required net worth, there are ________ days for correction.
0
Time to restrain the enforcement of a suspension order is ________ days.
10 days
Impending suspension order: The time to request a hearing is ________ days.
15 days
You have ________ days to pay a levy.
20
What is the penalty for not filing the activities report?
1 1/2 TIMES THE COST OF THE DRE EXAMINATION AND REPORT
You fail to file a DRE activities report. After ________ days a suspension can occur.
30 days
The California law that helps borrowers work out loan modifications is the
CFPA CALIFORNIA FORECLOSURE PREVENTION ACT
The Commissioner’s decision on a license must be within
60 calendar days
a late charge cannot be more than the greater of X% of payment due or $X
6% or $5
A fine for collecting an advance on a Loan Modification or taking a power of attorney on a Loan Modification is $X and X in jail for an individual and $X for a business entity.
A fine for collecting an advance on a Loan Modification or taking a power of attorney on a Loan Modification is $10,000 and 1 year in jail for an individual and $50,000 for a business entity.
A violation of the California Foreclosure Consultant Act is $X and X in jail
$10,000, 1 year
Misappropriation of funds is called _____________
Defalcation
A real estate broker must maintain records of X for Commissioner’s review
All listings, deposit receipts, canceled checks, trust records, and any documents in connection with a transaction for which an endorsement is required
According to the California Business and Professions Code, the Real Estate Commissioner must have a minimum of ____ years of experience as a real estate broker
5 years
A licensee’s surety bond must be payable to X and issued by an insurer authorized to do business in this state.
Commissioner
In the event the licensed mortgage loan originator fails to pay an annual renewal fee, the Department shall notify the originating entity of the impending suspension of the MLO’s license. The license may be reinstated if the licensed mortgage loan originator pays the fee owed within X days.
20 days
Under California law, how long is a residential mortgage lender license valid for
until suspended, surrendered, or revoked
When there is a significant material change to any of the information contained in a licensee’s application file, the licensee must inform the Commissioner of the Department of Corporations by sending written notification of this change and filing an amendment to the application. After receiving a completed filing, the Commissioner will approve or disapprove this proposed amendment to a licensee’s application within
20 days
The Fair Employment and Housing Commission, as part of the State and Consumer Services Agency, consists of how many members? Who are they appointed by, how long is their term?
7 members appointed by governor for 4 yr term
When a salesperson receives trust funds on behalf of the broker, these funds generally must be delivered to the broker at what time?
Immediately (not 3 days)
A real estate salesperson can receive compensation from
Sponsoring RE broker only
When an agent undertakes to arrange financing in connection with a sale, lease or exchange of real property, or when a person or entity arranging financing in connection with the sale, lease, or exchange undertakes to act as an agent with respect to that property, when shall a written disclosure of those roles be made to all parties in the transaction?
Immediately
A balloon pymt loan has a note that provides for a final payment that is more than X the amount of any of the immediately preceding X regularly scheduled payments.
twice, six
A foreclosure consultant must obtain and maintain a surety bond in the amount of $X in favor of X for the benefit of homeowners for damages caused by the consultant’s violation of law.
$100K payable to the State of California
What has been established with the State Treasury for the costs to oversee the activities of foreclosure consultants:
The Foreclosure Consultant Regulation Fund.
If a person is found guilty of violating the Civil Code pertaining to foreclosure consultant regulations, penalties could include fine of X and jail time of X
fine of not less than $1,000 per violation, and not more than $25,000, Imprisonment in the county jail for not more than one year.
How long does MLO have to correct bona fide error
within 45 days of discovery or receipt of a complaint
Willful violation while originating a covered loan can result in?
MLO suspension of 6 mths to 3 yrs
What report must be filed with the DRE by real estate brokers, salespersons, and real estate corporations who make, arrange, or service loans? When is it due?
RE-866
Due 1/31 or within 30 days of commencing mortgage origination activities
Penalty for failing to file RE-866
$50 per day for the first 30 days the report is not filed after its due date, and $100 per day for every day thereafter for a maximum of $10,000.
What are ‘own funds’?
- liability items on a person’s financial statement whether secured or unsecured.
- liability items on the financial statement of an affiliate of the person
- include cash, corporate capital, or warehouse credit lines
If an MLO is not in compliance with a DOC provision, his/her bond can be increased from $50,000 to $X?
$100K
Form RE 866 is due when?
To be filed 30 days after loan activity begins and Jan 31 each yr to DRE. It is the Mortgage Loan Activity notification
