Study Guide Flashcards
Acceptable Escrow Depository
Escrow agents licensed by the Corporation Commissioner
Banks
Trust Companies
Savings + Loan Associations + insurers
Underwritten title companies
Title 10 of the California Code of Regulations
This law governs the authority of the Real Estate Comissioner
Purchase Money Impounds
Money paid or advanced by a prospective buyer toward the purchase of property.
This money must be deposited or retained in an escrow or trust account
Service / Servicing
Receiving more than 3 installment payments of principle, interest, or other amounts placed in escrow, per terms of a mortgage loan
and performing servicing by a licensee relating to the receipt of the loan.
Trust funds
Funds collected by a licensee in connection with the making or servicing if a residential mortgage.
FFL - The Finance Lenders Law
Meant to ensure an adequate supply of credit to borrowers
Simplify and modernize the law governing loans made by finance lenders
Foster competition among finance lenders
Protect borrowers against unfair practices and encourage the development of sound lending practices.
Consumer and commercial loans are subject to this chapter.
Finance Lender
Any person who is engaged in the business of making consumer loans or making commercial loans
Late payment
A payment is not considered late until 10 days following the due date of the installment.
Consumer Loan
Consumer credit transaction secured by real property
Intended to be used or occupied, as a principal dwelling of the consumer that is improved by a 1-4 residential unit
Does not include reverse mortgage, and open line of credit, transaction for rental property or second homes, or a bridge loan (temporary loan having a maturity of one year or less)
Higher-priced mortgage loan
Defined under the truth in lending act
Consumer credit transaction secured by the consumers principal dwelling with an annual percentage rate that exceeds the average price offer rate by 1.5 or more percentage points for loan secured by a first lien on a dwelling, or by 3.5 or more percentage points for loans secured by a subordinate lien on a dwelling.
Average Prime Offer Rate
An annual percentage rate that is derived from average interest rates, points, and other loan price and terms currently offered to consumers by a representative sample of creditors for mortgage transactions that have low risk pricing characteristics.
The bureau publishes average prime operates for a broader range of types of transactions through a table updated at least weekly as well as methodology the bureau uses to derive these rates.
Fair Market Value
The Probable price that a property should bring in a competitive and open market.
Lead Generation
Loan solicitation with out origination
Master Servicing
Directly or indirectly holding the rights to service mortgage Ioans, but not actually conducting the servicing activities associated with the loans.
Commercial mortgage brokering or lending:
Acting as a broker or lender for commercial property
Office buildings, apartment buildings, shopping centers and residential property over 4 units
Credit insurance services:
Offering or selling an insurance policy to a borrower that pays off one or more existing debts secured by real property in the event of death, disability or unemployment.
First mortgage brokering
Providing the service of bringing borrowers and lenders together and assisting in negotiating a mortgage loan that gives the mortgagee security right over all other mortgages of the mortgaged property
First mortgage lending
Acting as a lender or creditor by offering to provide funds to a buyer for a mortgage loan that gives the mortgagee a security right over all the mortgages of the mortgaged property
First Mortgage servicing
Providing services that include the receipt of payments, customer service, escrow administration, investor accounting, collection or foreclosures for first mortgages the company holds/owns
Housing accommodation
Includes any improved or unimproved real property that is a residence, occupied or will be by the owner, and 1-4 dwelling units.
Does not include properties in which the owner applies for or has applied for a secured home improvement loan from a financial institution, in which the proceeds will be used to improve the property.
High-cost home loans
Acting as a broker or lender on a loan which meets the definition of a high-cost home loan under state or federal law
Mortgage loan modifications
Negotiating, attempting to negotiate, arranging, attempting to arrange, or otherwise offering to perform a mortgage loan modification which is defined as a change in one or more of a loan terms or conditions.
Mortgage loan purchasing
Purchasing closed mortgages (that are not currently in default) with the intent to service or resell to others.
Reverse mortgage originations
Acting as a broker or lender for a loan secured by a lien on a residential real estate in which the homeowner is not required to make payments on the loan until a specific event occurs (e.g. homeowner ceases to reside in the property).
Second mortgage brokering
Providing the service of bringing borrowers and lenders together and assist in negotiating a mortgage loan that has a subordinate rights to a first mortgage
Short sale
Making or facilitating a sale of residential property for an amount that is less then the remaining amount due on the loan that the residential property secures
Third-party first mortgage servicing
Providing services which include the receipt of payments, customer service, escrow administration, investor accounting, collections of foreclosures for first mortgages the company does not hold/own.
Third-party mortgage loan processing
Completing the mortgage loan application and supporting documentation for underwriting for an application your company did not take from the borrower.
Third-party mortgage loan underwriting
Underwriting a mortgage loan application and supporting documentation for an application your company did not take from the borrower nor are funding
Department of business oversight ( DOB)
Regulates investments, certain fiduciaries, and lenders.
DOB : For the purpose of California law lenders include ?
Deferred deposit lenders ( payday lenders )
Finance lenders ( lenders and brokers making consumer and commercial loans)
Residential mortgage lenders and servicers
Bureau of Real Estate (CalBRE)
Its mission is to safeguard and promote the public interest in REAL ESTATE MATTERS though:
Licensure
Education
Enforcement
- They regulate Real Estate licensees
- regulatory authority for the Bureau of Real Estate is found in the Real Estate Law and the Subdivided Lands Law
DOB consists of the following entities :
Executive Office
Operational Divisions
Executive Office:
led by the commissioner of the DOB who is appointed by the governor.
Houses the the Office of Legislation and Policy as well as the Office of Management and Budget
Operational Divisions
Department of Corporations
Financial Services Division
Enforcement Division
Bureau of Real Estate (CalBRE)
The Commissioner is appointed by the governor and serves as the chief executive of the Bureau of Real Estate.
DOB Responsibilities and Limitations
Consumer services
Education and outreach : educate consumers on making sound financial decisions.
Provides singular point of contact for department licenses, programs and regulations.
Provides information to consumers for filing complaints against companies that are regulated by the Department.
Responsibilities and limitation:
Operational divisions:
Financial Services
regulates lenders and certain fiduciaries.
Included in this area of responsibility are the following transactions:
Residential mortgages
Pay day loans
Escrow activities
Responsibilities and limitation:
Operational divisions:
Securities Regulation:
Regulates investment professionals and authorizes the offer and sale of securities
Responsibilities and limitation:
Operational divisions:
Enforcement:
Enforces the laws according to investment and Lender-Fiduciary programs administered by the DOB
Responsibilities and limitations
Executive office:
Commissioner of the DOB:
Administers the legal authority and creates policy for the DOB
Responsibilities and limitations
Executive office:
Office of Legislation and Policy:
Interprets and applies laws administered and enforced by the DOB
Responsibilities and limitations
Executive office:
Office of Management & Budget:
Manages the resources and financial operations for the DOB
The Bureau of real estate is responsible for?
For real estate licensees who function as mortgage lenders and brokers
Real Estate Law and Subdivided Lands Law
This law governs the business of real estate and associated transactions.
Consumer Recovery Account:
Enables a person who has been defrauded or had trust funds converted by a real estate licensee to recover at least some of his/her actual loss when the licensee is unable to pay for that loss.
Real estate licensee/licensee:
Refers to a person, whether broker or salesman, licensed under Chapter 3 of the real estate law and subdivided Lance law.
Administrative procedure act
This law governs the official process for agency inquiries and reprimands.
CRMLA
This law was enacted in 1994 and became operational in 1996 to provide mortgage bankers with a licensing law designed specifically to regulate the primary functions of originating in servicing residential mortgage loans.
Annual Audit:
An audit of the licensees books by a certified public accountant.
“Makes or Making residential loans” or “Mortgage Lending”
Processing, underwriting, or as a lender using or advancing for one’s own sons, or making a commitment to advance one’s own funds, to a loan applicant for a residential mortgage loan.
Mortgage loan/ Residential mortgage loan/ Home mortgage loan:
A federally chartered mortgage loan or a loan made to finance construction of a 1–4 family dwelling.
Mortgage servicer/Residential Mortgage Loan Servicer:
And approved servicer for the Federal housing administration, veterans administration, Government national mortgage Association, Federal National Mortgage Association, or Federal Home Loan Mortgage Corporation, and directly services or offers a service mortgage loans.
Broker :
Any person who is engaged in the business if negotiating or performing any act as a broker in connection with loans made by a finance lender.
California Financial Code (4970-51015)
COVERED LOAN
Consumer loan:
1.For a mortgage or deed of trust APR exceeding 8%
Periods of maturity on the 15th day of the month.
- The total points and fees payable before closing that will exceed 6% of the total loan amount.
California Government Code (12900-12987)
- California Fair Employment and Housing Act.
Declares it on lawful in a housing transaction to discriminate against any person because of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information of that person.
California Health and Safety Code
(35800-35833)
California Code of Regulations
(7114)
California Financial Discrimination Act
Foreclosure Consulting/ Foreclosure Rescue:
Directly or indirectly making a solicitation with the intent to receive compensation on behalf of the homeowner.
A) prevent, postpone or stop a foreclosure sale
B) obtain forbearance from a beneficiary or mortgagee.
C) assist in exercising a right of redemption
D) obtain an extension period which may reinstate the homeowners obligation.
E) obtain waiver or acceleration clause that is: contained in a promissory note or contract, secured by or contained in a deed of trust for, or mortgage on, a residence in foreclosure or in a default.
F) assist obtaining a loan or advance of funds.
G) avoid or ameliorate an impairment of credit resulting from a recorded notice of foreclosure or default.
California License Law and Regulation
The commissioner has 60 days from the receipt of a completed application to issue or deny a license.
If the commissioner requests additional information to satisfy application deficiencies and regulatory concerns, the applicant must respond within 90 days or the application will be considered withdrawn.
Persons required to be licensed:
Real Estate Broker License (company - MLO license Endorsement):
Places mortgages with lenders
Real Estate Broker License (individual - MLO license Endorsement):
Places mortgages with lenders. Sole proprietors must file as both a company and as an individual.
Real Estate Corporation License ( MLO license Endorsement):
makes residential loans.
Real Estate Salesperson License (Individual - MLO license Endorsement):
Takes the application and negotiates terms of the mortgage.
