How to Become a California Mortgage Broker
How to Become a California Mortgage Broker is a question often asked by entrepreneurs seeking to enter into the financial industry. First off, any person wanting to originate mortgage loans in the state of California must obtain a real estate license, either in the capacity of a real estate salesperson, or real estate broker.
In California, 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, based on the California Finance Lenders Law (CFL). The other is under The California Bureau of Real Estate (BRE) .
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.
Two approaches- How to become a Mortgage Broker in California
All California mortgage licenses are handled through the National Mortgage Licensing System (NMLS). Prelicensing requirements include approved courses that are 20 or more hours and contain 3 hours of Federal Law, 3 hours of Ethics, 2 hours of Non-traditional Mortgage Lending plus 12 or more hours of electives. This may be in addition to California-required content. Continuing Education Requirements (CE) include at least eight hours of NMLS approved instruction.Licensing under the Mortgage Broker licensed under the California Finance Lenders Law (CFL):
A Mortgage Broker licensed under the California Finance Lenders Law (CFL) of the Department of Corporations, 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 licensing fee for NMLS for Loan Originators under the CFL is $169. Other CFL fees apply. Click on the link in the first sentence of this paragraph for more details about this license.
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. Applicants must provide a surety Bond in the amount of $25,000.
CFL Mortgage Broker applicants must provide proof of U.S. Citizenship, or else proof of Alien Status. Detailed information of the history of the Mortgage Broker, including a prior ten-year residence and work history, including all names and addresses, is required as part of the application form.