Practice exam Flashcards
The commissioner has the power to do what ?
Hold formal hearings
Suspending, revoking, denying licenses
Issuing cease and desist orders
Who are the two regulatory authorities for mortgage professionals in California.
The department of real estate and the DOB
The commissioner does Not have the power to:
Sentence to jail
Criminally prosecute
Hold in contempt of court
The following are required to be licensed :
Lenders
Brokers
Loan originators
Servicer’s
The following are exempt from licensure:
Federally charted depository institutions
State charted depository institutions
Pension plan lenders
Attorneys acting on behalf of a clients case
Real estate brokers
Registered mortgage loan originators
Foreclosure trustees
The Application filing fee imposed in California for lending and mortgage servicer applicants is ?
$900.00
In the state of California the total initial application fee for a lender or servicer is ?
How much is the filing fee portion?
How much is the NMLS fee and investigation fee?
$1,100.00 total
$900.00 Application filing fee
$100.00 NMLS and investigation fee
Commissioner may deny an applicants license request if any control person is convicted of ?
- Fraud in anyway
- Dishonesty or deceit in past 10 years
- Held liable in any civil action by final judgement or any administrative judgement by:
Any public agency with in the past 7 years. ( including foreign courts )
What is the minimum SURETY BOND required in California under the Residential Mortgage Lending Act?
$50,000
If a licensee commits a violation than the commissioner may increase the surety bond requirement to?
$100,000
Mortgage brokers have minimum surety bond of ?
$25,000
What is the minimum Net Worth requirement for mortgage lenders and servicers under the Residential Mortgage Lending Act?
$250,000
It is an audited financial statement prepared by an independent certified public accountant.
What date is the Annual Financial Report due for BROKER licensees in California ?
March 15th
- it is filed to the commissioner for the purpose of determining the assessment amount for that year.
How often must the COMMISSIONER conduct and examination of every lender and servicer?
Every 48 months
Or at anytime they wish to do it
What is the maximum civil penalty the Commissioner may issue?
$25,000
Under California law, a mortgage loan originator license will Expire on midnight on what date if not renewed?
December 31st
What is the max penalty for failure to notify the Department of Real Estate that a real estate broker is involved in lending activities?
$10,000
- Regardless of the number of days
Real estate brokers who fail to notify the commissioner that they are involved in lending activities or who fail to obtain endorsement to act as a loan originator are subject to?
- $50 per day fine in the firsts 30 days
- $100 per day after the 31st day on
- Maximum of $10,000 fine regardless of how many days
Licensees must include a unique identifier on ?
- business cards
- stationary
- websites
- promotional fliers
- brochures
- emails
- radio, cinema, television ads
- print ads in news paper or periodical
Licensees do not need to include a unique id on
“For sale signs”
Funds in a trust account may only be taken out of the account for what reasons?
- They are only allowed to be released for payments authorized by the borrower.
- Refunds to the borrower
- Transfer of funds from a trust account in another depository institution
- Forwarding of funds when there is a new loan servicer for the mortgage loan.
- Removal for any legal reason stated in the lending agreement.
- Compliance with a court order from a regulatory agency.
- release of funds for any other reason is prohibited.
The following is not required to obtain licensure ?
Attorney working in an ancillary capacity
Which California Code deals with discrimination in housing and lending?
Health and Safety Code
California’s Health and Safety Code is also known as ?
the Housing Financial Discrimination Act and defines what is considered a housing accommodation .
What is the TOTAL application fee for a Mortgage Loan Originator, including all fees for for complete processing?
$384
What is the total break down of the total application fee for mortgage loan originators?
$330 - Initial license setup fee (includes $30 NMLS fee)
$15 - Credit Report fee
$39 - Criminal background check (additional)
What are the Continuing education requirements ?
3 Federal
2 Ethics + Fraud
2 Non Traditional
1 undefined
Marital Status is taken into consideration when qualifying a borrower for a loan in which case?
When taken into regard concerning California’s community property law.
- the borrowers total debts, considered in their repayment ability, must include their spouses as well.
What is the MAX penalty for a real estate agent non obtaining endorsement when when working as a loan originator?
$10,000 regardless of the number of days
The Department of Real Estate has the power to do all of the following :
Disciplinary actions for those who violate the Lending Law Formal hearings Suspending Revoking Denying licenses Issuing cease and desist orders
The Department of Real Estate does not have the power to?
Sentence licensees to jail
Criminally prosecute
Hold in contempt of court
A unique identifier does not need to be included on ?
Promotional Items
What is an example of unethical behavior by a mortgage broker?
A broker cashing a check made payable in the brokers name for settlement services.
Cannot accept cash or check for third party services that is made payable to them. ( Title insurance, appraisal )
What are examples of acceptable behavior for a mortgage broker?
A mortgage broker obtains a credit report to qualify a borrower, I’m this case they are permitted to accept cash or check made payable to them.
What are scenarios of Ethical behavior for a mortgage broker?
- receiving a check for settlement services made payable to the Escrow company
- receiving a check for the cost of a credit report made payable to the broker
- a broker cashing a check for the cost of a credit report made payable to the broker
If a client closes in there loan on January 15th. How long must the records be retained for ?
36 months - 3 years
*according to the Residential Mortgage Lending Act.
After receiving and application for licensure, how many days does the commissioner have to make a decision ?
60 days
MU4 must disclose:
- charged, convicted, pled guilty, or no contest to a felony at any time
- charged, convicted, pled guilty, or no contest to a misdemeanor involving financial services with in the past 10 years.
MU4 does not need to disclose :
Any non-financial misdemeanor
Such as a DUI resulting in a fine.
What are the reasons that the Commissioner will deny a request to obtain a license?
- license revoked in any jurisdiction
- convicted, pled guilty, or no contest to a felony with in the past 7 years.
- fraud at any time
- has no met the education requirement
What must occur for a loan originator to have to notify the Department of Corporations and the NMLS ?
Change of residence or business address
- Must notify the Department at least 10 days prior or the move.
- Failure to notify may subject the licensee to a civil penalty not to exceed $500.
The following acts and practices are PROHIBITED for MLOs under the Finance Lenders Law and the Residential Mortgage Lending Act ?
- underwriter who states they can originate loans on their business cards.
- an independent contractor preforming underwriting with out a unique ID.
- originating with out a license.
The following acts and practices are NOT prohibited for MLOs under the Finance Lenders Law and the Residential Mortgage Lending Act ?
A licensed loan originator collecting info t be used on 1003 form
How long does an MLO have to file for a hearing after a notice of suspension?
15 days
- failure to request a hearing within the 15 day period constitutes a waiver of the right to a hearing.
What will happen if an MLO does not attend a scheduled hearing on a disciplinary action taken by the Commissioner?
The commissioner will deem the final order.
