What License Is Needed to Originate Home Loans in California?
After the passage of the Secure and Fair Enforcement for Mortgage Licensing Act on July 30, 2008, California revamped its requirements to obtain a mortgage loan originator license for those working in the residential market. While it had been purely a state license, the California MLO license now requires meeting national standards.
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Prelicensing Education
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To apply for the MLO license, you need 20 hours of education. Although 12 hours can be in electives of your choice, eight hours must be distributed as follows: three hours of training in ethics and related fields, three hours of training in federal laws and regulations applying to the mortgage industry and two hours of training in how to work with nontraditional mortgages and in the lending standards applied to them.
Licensing Test
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To get the MLO license, you will need to pass a two-part test offered by the Nationwide Mortgage Licensing System and Registry. The NMLS test contains both a national and state-specific portion customized for California, and must be passed with at least 75 percent correct answers.
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Licensing Fees and Application
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For an individual salesperson, the fee is $330, as of 2009, which includes a $30 fee to the MLS. The applicant must fill out an MU-4 form, and submit it along with fingerprints. MLO applicants also need to affiliate with a company that will both sponsor them and cover them under a surety bond. Note that the fingerprinting process carries a separate $39 fee in addition to a $15 fee for a credit report.
Renewing the MLO License
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Once you have your MLO license, you will need to renew it yearly. Yearly renewals cost the same $330 as your original license. In addition, California and the NMLS require that you complete eight hours of continuing education. The eight hours must be spent in the same types of courses required for the mandatory eight hours of licensing instruction.
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