New License Requirements for Mortgage Loan Activities!
Monday, January 4, 2010 Add a comment
Happy New Year!
Along with the hope of prosperity, the new year also brings with it some new and exciting changes in our state and federal laws. One important change will be new license requirements for anyone conducting mortgage loan activities.
As of January 1, 2010 new license requirements go into effect for anyone conducting residential or commercial Mortgage Loan Activities. Any person engaging in mortgage loan activities must report to the Department of Real Estate their intent to arrange or service loans secured by real property, by January 31, 2010.
Also, any person conducting licensed activities as a Mortgage Loan Originator (MLO) is now required to have the following:
- An endorsement on their Real Estate License
- Register with the Nationwide Mortgage Licensing System & Registry (NMLS&R)
- Satisfy the requirements to obtain an MLO license (including new qualification assessments, federal & state exams, and background checks). NO EXCEPTIONS OR EXEMPTIONS for existing licensees.
- The MLO endorsement must be issued by January 1, 2011 on the real estate license. (Endorsement applications for qualified MLO registrants must be submitted by September 15, 2010 to be issued by January 1, 2010.
Failure to comply can result in the assessment of penalty fees of $50 per day for the first 30 days, and $100 per day for every day thereafter up to a maximum of $10,000.
Senate Bill 36 (SB36), signed into law October 2009, was enacted to identify licensees conducting mortgage activities and bring California into compliance with the federal Secure and Fair Enforcement Mortgage License Act (SAFE Act).
Under the SAFE Act all Department of Real Estate (DRE) licensees who conduct MLO activities must meet the following requirements to qualify for the MLO endorsement:
- Take and pass the National and California Unique State component of the SAFE written exam.
- Complete 20 hours of pre-license education.
- File an online MLO license endorsement application and license enrollment fee on the NMLS&R.
- File a NEW set of fingerprints using a NMLS&R live scan vendor.
- Authorize NMLS&R to obtain a credit report on the applicant.
The SAFE Act prohibits the licensing of an MLO for the following reasons:
- An applicant has ever been convicted of a felony involving fraud, dishonesty, breach of trust, or money laundering; or convicted of any felony in the 7-year period prior to applying for an endorsement.
- An applicant has eve had a MLO license revoked in any governmental jurisdiction, or
- An applicant has demonstrated lack of financial responsibility by showing disregard in the management of his or her own financial condition.
Further information can be found on the DRE website at www.dre.ca.gov, or by calling the DRE Licensing Section at (877) 373-4542.

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