NEW licensing requirements for Mortgage Brokers

Effective January 1, 2010, any Mortgage Loan Broker (MLB) who makes, arranges or services residential or commercial mortgage loan secured by real estate in California must report to the Department of Real Estate (DRE) prior to January 31, 2010. This report must be done online at the DRE’s website (www.dre.ca.gov) using Form RE 866, Mortgage Loan Activity Notification. Additionally, future periodic business activity disclosures are required as in the past.
Failure to submit the Mortgage Loan Activity Notification prior to January 31, 2010 will result in a fine of $50 per day for the first 30 days the report is not filed.

Any licensees making, arranging or servicing consumer loans secured by one-to-four unit residential property, called Real Estate Settlement Procedures Act (RESPA) loans, must obtain a Mortgage Loan Origination (MLO) endorsement on their real estate license prior to January 1, 2011.

In addition to the endorsement required on the real estate license for making or arranging consumer loans secured by one to four unit residential property – RESPA loans, not business loans – the MLB must: register on the Nationwide Mortgage Licensing System and Registry. Each broker, branch, mortgage loan lender and MLO will be assigned a single license record in the Registry. No fee will be charged to create the initial record; comply with all federal requirements for MLO licensure. These include new qualification assessments, federal and state exams and background checks. No exceptions or exemptions will be given to existing licensees; and be issued an MLO endorsement on his real estate license by January 1, 2011. For an endorsement to be issued by January 1, 2011, an application for endorsement must be submitted by September 15, 2010. The initial endorsement will expire on December 31, 2011, and must be renewed annually. The endorsement will carry a unique identifier assigned by the Registry. The MLB’s California real estate license number will not change.

Any MLB who deals with consumer loans secured by one-to-four unit residential property (RESPA loans) and fails to obtain the MLO endorsement by the January 1, 2011 deadline will incur a fine of $100 per day, to a maximum of $10,000.

credits to: First Tuesday Journal Online