Who
must obtain a MLO License?
Federal law established by the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act)
now states that any individual who, for compensation or gain, takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan application, must be licensed or registered as a Mortgage Loan Originator (MLO). A key part of the law is the requirement for licensing of Mortgage Loan Originators through the Nationwide Mortgage Licensing System (NMLS). This new law also applies to:
1) Individuals licensed under the California Department of Real Estate (salesperson or broker).
2) Individuals licensed under the Department of Corporations (CFL or CRMLA).
NOTE: Independent loan processors/underwriters must also comply with SAFE Act licensing requirements.
Real Estate Licensees Under CA-DRE
Any individual who performs mortgage loan origination activities under the authority of a real estate license issued by the California Department of Real Estate may not continue to perform those activities on or after January 1, 2011 without obtaining a Mortgage Loan Originator (MLO) "License Endorsement" issued for their real estate license. Applicants for a License Endorsement must complete a 20 hour pre-license education requirement and successfully complete the SAFE MLO state examinations (both national and CA state components).
NOTE: A real estate license is needed in order to qualify for a MLO License Endorsement through CA-DRE. Specific state approved courses will continue to be required to obtain a real estate license.
20 hr Pre-License Course
This course meets federal MLO prelicense education requirements as required by the SAFE Act. It is approved by the NMLS and covers both the National and California state specific content for both state licensing examinations.
Unlike traditional online courses that emphasize technology alone as a means of delivering education, this course uses an instructor-led format more similar to a college-level online course. The presence of an instructor/facilitator will allow you to learn from the expertise and experiences of the instructor to become more fully prepared to work within the mortgage industry.
The NMLS requires that online instructor-led courses have a fixed start and ending date. This 20-hour course session will become active on the start date at 12:01 AM and finish on the end date at 11:59 PM (Pacific Standard Time). Students may begin the course any time after the start date and work at their own pace but no faster than one chapter per day. This course runs for 7 consecutive days and must be completed on the designated end date. Seat time is monitored and enforced and you must accumulate 20 hours on the course to receive credit.
Although this is an online course, student participation is mandatory. Active participation in this class is required and you will be expected to complete all mandatory assignments (chapter quizzes, focus questions, case studies) to receive credit for the course. Adequate participation is determined by the online instructor.
The NMLS requires that online instructor-led courses have a fixed start and ending date. Completion time for this course is 7 days.
Each 20-hour course session will become active on the start date at 12:01 AM and finish on the end date at 11:59 PM.
Seat time is monitored and enforced and you must accumulate 20 hours on the course to receive credit.
You may begin the course any time after the start date and work at your own pace but no faster than each days assignment.
Mandatory daily assignments include chapter quizzes, focus questions, and case studies submitted for instructor review.
70% or better on open book final examination to pass the course.
As your NMLS-approved course provider, Chamberlin will transmit your completion record to the NMLS. Since the NMLS charges $1.50 per credit hour to bank your credit hours, $30 ($1.50 x 20 hrs.) will be added to your order when you enroll.
20 hr Pre-License Course—Price: $299 plus $30 NMLS Banking Fee
8 hr Continuing Education
Mortgage loan originator licensees under the DOC, or DRE licensees with a "license endorsement," approved for issuance in 2010 will expire on December 31, 2011. The annual renewal period for your mortgage loan originator license will be from November 1, 2011 through December 31, 2011. You must renew your license during this period in order to ensure that you are authorized to continue originating loans during the 2012 calendar year. There are several requirements which must be met in order to renew your license. The requirements are:
Log in to your NMLS account and request renewal of your mortgage loan originator license or "license endorsement." You must also review your MU4 for accuracy, make any required changes and attest to its accuracy.
File evidence of completion of 8 hours of continuing education with the NMLS, which is completed in 2011. As your NMLS-approved course provider, Chamberlin will transmit your completion record to the NMLS. There are no additional California specific education requirements. The continuing education must include:
3 hours of federal law and regulations;
2 hours of ethics; and,
2 hours of lending standards for nontraditional mortgages.
Payment of the annual renewal fee:
Renewal fee of $300 (DRE license endorsements)
NMLS annual renewal fee of $30
NOTE: All renewal fees are to be paid through the NMLS Website. Fees may be paid by credit card or ACH transfer.
8 hr Pre-License Course—Price: $119 includes $12 NMLS Banking Fee
SAFE Exam Prep
CA Safe Prep is much more than a bank of sample questions. Our intent with this course is to give you a solid
understanding of the subject matter so you can answer variations of questions you may encounter on the state
exam. The content of this course was specifically written based on the National and State component outlines
provided by the NMLS.
National Component (90 scored test questions - 10 unscored test questions) - Content Outline
CA State Component (50 scored test questions - 10 unscored test questions) - Content Outline
Covers both the National and CA State components of the NMLS exam
Course content written to NMLS state exam outlines
Hundreds of sample questions throughout the course
Course ends with comprehensive final briefing examination
Additional course features include:
Study at your own pace
Keeps track of your progress
Brings you back to where you left off
Final briefing examination online
Glossary of real estate terms in text and audio
Links to mortgage-related web sites
Instant graded responses
Toll free technical support
CA Safe Prep—Price: $149
License Requirements
Pre-requisites for license applications
All applicants must apply for a license through the NMLS by filing a Form MU4 and receiving a sponsorship by a Department of Corporations licensed company holding a valid unique identifier with NMLS. All DRE real estate licensees (salesperson or broker) who conduct residential MLO activities must apply for and obtain a "license endorsement". CLICK HERE for complete details.
Background checks including FBI fingerprint checks and civil and administrative records checks.
Authorization to obtain an independent credit report obtained by NMLS from a consumer credit reporting agency.
Demonstrate financial responsibility, character and general fitness such as to command the confidence of the community and to warrant a determination that the mortgage loan originator will operate honestly, fairly and efficiently.
20 hours of pre-licensing education including 3 hours of federal law and regulations, 3 hours of ethics and 2 hours of training related to nontraditional mortgage products. Pre-license education must be courses which have been approved by NMLS.
A passing score on the national and California components of the SAFE Act Mortgage Loan Originator tests. The written tests must be taken through test providers approved by NMLS.
Coverage by a surety bond provided by the mortgage loan originator's employer.
The following conditions would preclude an applicant from obtaining a license as a mortgage loan originator or from annually renewing a license:
An applicant has had a mortgage loan originator license revoked in any governmental jurisdiction unless there was a subsequent formal vacation of the revocation.
The applicant has been convicted of, or pled guilty or nolo contendere to a felony in a domestic, foreign or military court during the 7 year period preceding the date of the application; or at any time preceding the date of application if such felony involved an act of fraud, dishonesty or a breach of trust or money laundering.
A showing that the individual is not financially responsible by showing a disregard in the management of his or her own financial condition
Pre-license and continuing education requirements
Applicants must complete 20 hours of pre-license education. The courses must be NMLS approved and include 20 hours of pre-licensing education including 3 hours of federal law and regulations, 3 hours of ethics and 2 hours of training related to nontraditional mortgage products.
Mortgage loan originator applicants may begin taking their pre-license education courses at any time. NMLS provides pre-license education course information to individuals who create their NMLS record and obtain their unique identifier through the system. Select course providers through NMLS, complete the training and have the course provider report the completion directly to NMLS.
Mortgage loan originator licensees must complete 8 hours of continuing education each year in order to renew their licenses during the November 1 through December 31 renewal period. The continuing education must include 3 hours of federal law and regulations, 3 hours of ethics and 2 hours of training related to nontraditional mortgage products. Pre-license education completed after January 1, 2010 which meets the continuing education requirements will be accepted as continuing education for renewing the license for 2011.
Federal and State Tests
Applicants must receive a passing score on both a national and California test. The national test is currently available and may be taken anytime. The California test will be available February 22, 2010. Enrollment opens for the California test on January 22, 2010. Test information will be available to mortgage loan originator applicants who create their NMLS record and obtain a unique identifier through the NMLS system. Applicants must schedule the tests through the NMLS website at www.nationwidelicensingsystem.org
How to Apply
Mortgage Loan Originator License: How to Apply 1. Each mortgage loan originator must be separately licensed which requires the submission of Form MU4 through NMLS to the California Department of Corporations. All DRE real estate licensees (salesperson or broker) who conduct residential MLO activities must apply for and obtain a "license endorsement". CLICK HERE for complete details. The Form MU4 must be submitted electronically through the NMLS website at www.nationwidelicensingsystem.org. For NMLS system questions, call the NMLS Call Center at 240-386-4444.
2. The mortgage loan originator's license will not be approved until a sponsorship request is submitted by the mortgage loan originator's employer. A quick guide titled "Create a Company Sponsorship" at the following link will help walk your company through this process: NMLS Quick Guides
3. License approval will be issued in an "Approved-Conditional" status once the MU4 filing is reviewed by the Department of Corporations and all other license requirements are met. To receive full "Approval" status the mortgage loan originator must meet the following requirements by July 31, 2010. Applicants are encouraged to submit their mortgage loan originator applications to the Department of Corporations by May 28, 2010 to allow for processing and completion of the application and license issuance by July 31, 2010.
Certification that 20 hours of pre-license education courses have been completed
Passing grade on a national and California Mortgage Loan Originator test
Fingerprints for an FBI criminal history background check
Authorization for a credit report to be provided to the Department of Corporations
License must be sponsored by a company licensed by the Department of Corporations.
4. Total license costs: [$TBD] plus the NMLS processing fee of $30.00.
NMLS Processing Fees
Department of Corporations Fees
CFLL
CRMLA
MLO
Company
Branch
MLO
Company
Branch
Company
Branch
Transition fee
$100
$20
N/A
$0
$0
$0
$0
$0
Application fee
$100
$20
$30
$300
$300
$1,000
$0
TBD
Annual renewal fee
$100
$20
$30
$0
$0
$0
$0
TBD
Change in sponsorship
$0
$0
$30
$0
$0
$0
$0
TBD
5. All fees are collected through the NMLS and ARE NOT REFUNDABLE.
WHO TO CONTACT
For NMLS system questions, call the NMLS Call Center at 240-386-4444. For Department of Corporations specific questions call the Department of Corporations Call Center at 866-ASK-CORP.
Schedule Your SAFE Exam
MLO License: Schedule Your SAFE Exam
The SAFE Mortgage Licensing Act requires all licensed Mortgage Loan Originators to pass a
written test developed by NMLS. Each Loan Originator must take the National test component
and a State specific test component in order to satisfy the SAFE test requirements in California.
Once a Mortgage Loan Originator has registered and paid for a test enrollment through NMLS,
an appointment can be scheduled for the corresponding test. With SAFE testing deadlines
already past, Mortgage Loan Originators are encouraged to schedule a test appointment soon
after obtaining an enrollment. Appointments are scheduled on a first come, first serve basis. The sooner an appointment is scheduled, the greater the likelihood of finding a preferred testing
date, location, and time.
MLO/SAFE Prep
Content Outline