Article Summary: This article will help anyone looking for information pertaining to a mortgage license in the state of California or anyone looking to become a mortgage broker in California.
In California, one of the most active states for Mortgage Brokers, there are two separate approaches to
becoming a Mortgage Broker, each with its own rules and responsibilities. One is under the California Department of Corporations,
www.corp.ca.gov, based on the California Finance Lenders Law (CFL). The other is under The California Department of Real Estate (DRE),
www.dre.cahwnet.gov.
Mortgage Brokers licensed under the California Department of Real Estate may perform regular broker and negotiating business with banks, savings & loans, credit unions, and thrift & loans. Mortgage Brokers licensed under the Department of Corporations may only negotiate loans with a lender licensed under the California Finance Lenders Law.
Here?s more detailed information on the two approaches you may use to become a Mortgage Broker in California.
A Mortgage Broker licensed under the California Finance Lenders Law (CFL) of the Department of Corporations, www.corp.ca.gov/pdf/CFL839l.pdf, is also referred to as being a Negotiator, or having a Negotiator License. Those holding this license are only authorized to negotiate loans or perform any act as a negotiator in connection with loans that are made by a Licensed Lender under the California Finance Lenders Law. This means the Mortgage Broker may not make any direct loans under this license, nor negotiate or broker loans to banks, savings & loans, thrift & loans, or credit unions.
The license issued under the California Finance Lenders Law may be applied for by individuals, partnerships, LLCs, or corporations. Once issued, the license is not transferable or assignable.
The same application form is used for both CFL Mortgage Brokers and Mortgage Lenders. When applying for a CFL
Mortgage Broker License in California applicants pay $100 for a non-refundable Investigation Fee and $200 for the non-refundable Application Fee. Mortgage Broker applicants need to obtain and maintain a Surety Bond in the amount of $25,000.
CFL Mortgage Broker applicants must provide proof of U.S. Citizenship, or else proof of one?s Alien Status. Detailed information of the Mortgage Broker applicant?s past, including the applicant?s prior ten-year residence and work history, including all names and addresses, is required as part of the application form. What are applicants ?not? required to do? Take an examination or take many hours of continuing education courses.
Licensing under the California Department of Real Estate (DRE):
California does not actually have a separate Mortgage Broker License. When someone obtains a California Real Estate Broker License they are automatically licensed to function as a Mortgage Broker. This means they can list and sell real estate, and also negotiate loans secured by real estate, whether first mortgages or subordinate mortgages.
If someone is licensed as a Mortgage Broker in a state other than California they still need to obtain a California Real Estate Broker License in order to broker or negotiate even one loan in California. However, it is possible to co-broker a loan with someone who is already licensed in California and share the commission.
Requirements for obtaining a California Real Estate Broker?s License (www.dre.cahwnet.gov/relaw_pdf/Regs.pdf) include being at least 18 years of age, and either a U.S. Citizen or proof of Alien status.
The applicant must take a thorough examination covering all aspects of the real estate business and real estate financing. The examination fee is $50, and two college-level statutory courses (different than continuing education courses) must be finished before taking the examination. One also needs to take 45 hours of approved continuing education courses after
becoming a Mortgage Broker in California.
When applying for the DRE Mortgage Broker License in California the applicant pays a $165 license fee, plus a $65 fingerprinting fee. Mortgage Brokers must have a physical office in California, and any loan officers working in the office must also provide fingerprints and take the approved examination.
Advertising any type of real estate services over the internet in California, including those of a Mortgage Broker, requires a California Real Estate Brokers License. The advertising is considered to be solicitation of a California resident if/when read by a California resident, so all ads must contain a disclaimer stating the ad is not valid in California.
The California Association of Mortgage Brokers (CAMB),
www.cambweb.org, is an affiliate of the National Association of Mortgage Brokers (NAMB), www.namb.org. The CAMB actively provides education and legislative support for members, and if you want to become a Mortgage Broker in California, membership in the CAMB is a true asset.
We also offer information and resources for California Commercial Mortgage