Mortgage News

Becoming a mortgage broker in California can seem confusing at first. The state offers three different types of broker licenses, issued by different agencies, and having different licensing requirements.
There is the finance lender license (CFL) and the residential mortgage lender license (CRML) both of which are issued by the California Department of Business Oversight (DBO). There is also the real estate broker license, often called a BRE license because it is issued by the Bureau of Real Estate which also allows for working as a mortgage broker.
The different broker licenses have slightly different licensing requirements. Some have to submit a surety bond as an extra layer of protection for homebuyers, whereas others need to pass pre-licensing education and an exam. Read on below for an overview of the different license types and what you need to do to get licensed.
For fun, here's some industry postings of actual jobs as loan officer:
California Mortgage Broker License types
The following are the three types of mortgage broker licenses issued in California and who is required to obtain each of these.
?Finance broker license: Anyone making and brokering consumer and commercial loans in the state is required to obtain this type of bond (except those listed here). The limitation of this type of license is that such brokers are only allowed to broker loans with those holding a finance lender license. They cannot do business with any other type of lenders in the state, such as banks or credit unions.
?Residential mortgage lender license: This type of license is required of those who make or service residential mortgage loans in California. While it allows them to make and service loans it also lets  them to broker loans IF they also have a mortgage loan originators license. RML license holders can broker to other RML lenders, as well as institutional lenders, such as state or federally chartered institutions.
?Real estate broker license: This license allows licensees to act as real estate brokers and mortgage brokers in California. Due to the combined nature of the license, application requirements differ from the other two licenses and previous experience and an examination are necessary.
How to get licensed
The pre-licensing and application requirements for the different mortgage broker licenses vary slightly. Here is what each license applicant has to complete and comply with in order to obtain one of the above licenses.
To obtain a finance broker (and/or) lender license, you must apply through the Nationwide Mortgage Licensing System (NMLS) and submit a license application. The license applicationmust include a business plan, responses to disclosure questions, certificate of authority, an organizational chart, and a number of additional documents. Upon applying you will also be required to:
?Have a net worth of $50,000 if you are only applying for a residential broker license, a net worth of $250,000 if you are applying for a residential lender/broker license, and a net worth of $25,000 if you are applying for a non-residential lender or broker license (these applicants apply directly through the DBO instead of the NMLS)
?Submit and maintain a $25,000 surety bond for any of the above licenses.
?Submit criminal background checks for the owners, officers, directors, managers and all other persons responsible for lending activities
?Pay a $400 licensing and processing fee when applying at the NMLS
Residential mortgage lender license requirements
To obtain an RML license, you need to comply with the license requirements detailed below. Remember that to use your RML license for mortgage brokering activities, you must hold a California mortgage loan originator license, which you can also apply for through the NMLS. RML licenses are also obtained through the NMLS. When applying, apart from completing your application form, you will also need to:
?Become an approved lender or servicer for at least one of the following: the Federal Housing Administration (FHA), Veterans Administration (VA), Farmers Home Administration (FmHA), Government National Mortgage Association (Ginnie Mae), Federal National Mortgage Association (Fannie Mae), or Federal Home Loan Mortgage Corporation (Freddie Mac)
?Submit audited financial statements that document a net worth of at least $250,000
?Submit a $50,000 surety bond
?Submit criminal background checks performed for all stockholders, principal officers and directors
?Pay a $1,100 licensing and processing fee through the NMLS
Real estate broker license requirements
To become licensed as a real estate broker, you will need to apply through the California Bureau of Real Estate. Additionally, to function as a mortgage broker, applicants must also get a mortgage license originator endorsement from the NMLS. To become licensed as real estate brokers, applicants will need to:
?Submit a broker examination application (and pay a $95 exam fee)
?Complete or submit proof of completion of eight college-level courses in real estate
?Provide proof of at least two years of full-time licensed salesperson experience within the last five years
?Pass the broker examination
?Complete and submit a broker license application (and pay a $300 licensing fee) and a Live Scan Service Request
Unlike the above license types, applicants for this license are not required to post a surety bond. Once you have received your real estate broker license from the BRE, you can then apply for an MLO endorsement through the NMLS. This will require you to submit an application and, depending on whether you are applying as a company or individual, you may also be required to pass further education and examination.
Surety bond requirements
The requirement for finance brokers and residential mortgage lenders to obtain a surety bond may require some explaining for new applicants. Surety bonds are binding agreements required by the state. They are put in place to guarantee that licensees who are bonded will comply with state laws and regulations such as the California Residential Mortgage Lending Act or the California Finance Lenders Law.
The provisions of these bonds vary depending on the license type. They are typically conditioned to guarantee that licensees will comply with any agreements they have with their clients and fulfill any obligations they have under the above-mentioned laws. Bonds also guarantee that licensees will not engage in dishonest business practices such as fraud or misrepresentation.
If brokers are found to have violated any of the above conditions, a claim can be made against their bond by anyone who has been harmed as a result of such violations. In this case, the surety which backs the bond will extend compensation to claimants, which can be as high as the full amount of the bond. Under the bond agreement, the bonded licensee must then repay the surety in full for any compensation it extends.

Posted by Anne James on March 5th, 2019 8:05 AM

Getting pre-approved for a home loan purchase doesn't have to cost you more than 4 FICO points for a 'hard inquiry.' Once you've let your loan broker or loan officer run your credit, you should know your real FICO score-not the Credit Karma or credit card FICO reported so often inaccurately from a Residential Mortgage Credit Report that should be handed to you in a two-page summary and reviewed for issues with your 'first-choice broker' or lender.
After you know your RMCR FICO score, the middle of the three scores and the lowest middle of two or more borrowers, you can shop rates confidently by comparing rates for the loan on the same day with two or three lenders. The is rates change daily so be sure and ask for your LOAN ESTIMATE from the lenders on the same day. 
About running that RMCR report with your 'First-Choice' lender: Get the FICO scores and review or choose another lender. The rest should go off your Consumer two-page FICO scores you are entitled to recieve.
Happy hunting and remember, you have only 14 days to recieve full lender approval once you make a successful offer on a home so get that pre-approval first!

Posted by Anne James on November 6th, 2018 9:07 AM
What Is the FHA 203K Program?

The FHA 203K loan program provides home buyers the opportunity to buy and fix up a property, without exhausting their personal savings.  Home buyers can purchase a property and include whatever costs to make required repairs or desired updates, or to fully renovate the property, all into one simple thirty-year fixed loan.   ALL work starts after, not during escrow, the purchase of the property, using the money set aside by the lender.
Image result for How much do you have to put down on a 203k loan?
To qualify for a 203k loanyou'll need to meet the same requirements as any other FHA loan: Your credit score must be at least 620 or 640, depending on the lender. Your maximum debt-to-income ratio can only be 41% to 45% You need a down payment (or home equity if you are refinancing) of 3.5% or more.
What are the drawbacks to an FHA 203k loan? For one, the interest rate is higher than an a simple FHA Purchase loan or refinance. Secondly, it takes some work; you must get bids on the repairs or renovations approved by the underwriter and the money is withheld and invoices submitted to escrow for payment. Also, there is a limit to the renovation loan amount-usually $35,000 up to 100%.
For more information, call Anne E James at 562-320-0510 or email

Posted by Anne James on July 30th, 2018 11:06 AM
Homeowners who might provide a listing for potential Homebuyers won't sell as buying another home, whether bigger or downsizing, means a mortgage with a rate hihger-- one to two percent higher than their current home. In addtion, the new home will be up to thirty or forty percent higher in price than their current home. Historically low rates and rising prices have created a pressure cooker for desperate buyers who are moving to lower-priced counties with a long commute or simply to other states such as Nevada, Texas, or even across country if job offers await at higher pay.
Potentially exisiting home sales rose by 3.3 percent, or a gain of 194,100 sales, per First American Financial Corp. statistics. That market is under-perforning by 4.2 percent or 256,000 in sales, locking out would-be homebuyers and literally locking in potential home sellers. That's a big market out there to sell your home to or a lot of equity locked up in a low-rate on existing homes.
One answer to rate-locked homeowners is to take cash out of their existing home in the form of a Home Equity Line of Credit to downsize or move to a retirement state. With historically high rents, waiting for rates to come down while collecting rent may make sense.
Anne E James is a California-licensed Mortgage Broker with 23 years experience in lending. You can email her at
Posted by Anne James on July 23rd, 2018 5:08 PM
Buying a home and finding homeowners insurance at the last minute is a drag on you, the buyer, and, Reliance Mortgage Service, the lender. Here's the best unbiased comparison of homeowners insurance companies I've seen from LendEDU, a nonprofit consumer company:
Lendedu Best Homeowners Insurance 2018

Click on the link and you'll find student loan comparisons and more!

Best, Anne E James, 

Posted by Anne James on June 27th, 2018 5:46 PM
Posted in:VA Loans and tagged: Rocket Loan Depot Freedom
Posted by Anne James on April 3rd, 2018 7:11 AM
Posted by Anne James on March 20th, 2018 7:20 AM
Mortgage Rates Lowest In Weeks

Mortgage rates fell today following a tame read on inflation as well as the announcement of Rex Tillerson's departure from the White House.  The Consumer Price Index--the most widely followed economic report on consumer-level inflation--showed prices moving up 0.2% in February (rounded up from 0.1501%).  The median forecast called for a 0.2% increase.  

When inflation is falling (or rising more slowly), it tends to benefit bond markets, thus pushing rates lower.  Given that the inflation data was fairly close to forecasts, it didn't have any sort of extreme impact today, but it added some downward pressure on rates.  The Tillerson news came out a few minutes later.  Markets reacted as they typically do to news that creates uncertainty with stocks and rates moving lower together.  But since Tillerson's departure wasn't a huge surprise, it too failed to cause a profound move lower in rates.  

Even then, we have to separate the intraday rate movement that exists in bond markets from the 1-3x per day rate sheet changes from mortgage lenders.  As of this afternoon, most lenders are still on their first rate sheet of the day.  Even so, those rates had improved enough to make them the lowest in more than a week.  That said, many borrowers will still see the same NOTE rates as yesterday with the improvement coming in the form of lower upfront costs or a higher lender credit (aka, lower EFFECTIVE rate, not lower NOTE rate).

Posted by Anne James on March 13th, 2018 4:42 PM

Mortgage rates moved lower today--somewhat significantly relative to recent examples--ultimately hitting the best levels in more than a week for most lenders.  Trump's tariff announcement served as a catalyst for market movement in both stocks and bonds (which underlie mortgage rates).  Investors currently view the proposed tariffs as something that would do more harm than good for the overall economy.  Economic growth generally corresponds with rising rates, so anything that calls it into question can have the opposite effect.

It's too early, at the point, to know if the tariff-related news will be a big deal for rates apart from today's headline shock value.  What we do know is that rates are officially putting up their best fight so far this year when it comes to pushing back against the dominant trend (the one that's carried average mortgage rates more than half a point higher).  While many lenders aren't in much better territory than Monday morning, lenders who released updated rate sheets this afternoon are in the best shape in more than 2 weeks.  We haven't been able to say "2 week lows" since early December.

Loan Originator Perspective

Bond markets posted modest gains today, but still remained below Monday's levels.  We may be establishing a new range here, which would certainly beat rates continuing higher.  I'm not ready to contemplate floating deals yet, since there's no apparent motivation for yields to fall, but at least we're not posting daily sell-offs either. Ted Rood, Senior Originator

We might actually have 2 green days in a row in the bond market.  It has been a while.  Bonds have still not broken any important levels, so i continue to favor locking.  I would wait until as late as possible as reprices for the better are a possibility. -Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

  • 30YR FIXED - 4.5-4.625%
  • FHA/VA - 4.375%
  • 15 YEAR FIXED - 3.875%
  • 5 YEAR ARMS -  3.5-3.75% depending on the lender
Posted by Anne James on March 2nd, 2018 10:13 AM
Credit Score Ranges: What do they Mean?

If you’ve recently been contacted by a debt collector for the first time, or you’re worried that a collector will contact you soon because you’ve fallen behind on your bills, you probably have many questions and are understandably nervous about the process.

This article will give you an introduction to the debt-collection business so you can understand the collection agency’s perspective. This should give you a better idea of what motivates debt collectors and what their incentives are, which can help smooth your interactions with them and make the process less stressful.

The Business of Debt Collection

Debt collectors often work for debt-collection agencies, though some operate independently and some are also attorneys. Sometimes these agencies act as middlemen, collecting customers’ delinquent debts – debts that are at least 60 days past due –  and remitting them to the original creditor. The creditor pays the collector a substantial percentage, typically 25% to 45%, of the amount collected. Debt collection agencies collect delinquent debts of all types: credit card debt, medical debt, automobile loan debt, personal loan debt, business debt, student loan debt and even unpaid utility and cell phone bills.

Collection agencies tend to specialize in types of debt. For example, an agency might only collect delinquent debts of at least $200 that are less than two years old. A reputable agency will also limit its work to collecting debts that are within the statute of limitations, which varies by state.

For difficult-to-collect debts, some collection agencies also negotiate settlements with consumers for less than the consumer owes. Debt collectors may also refer cases to lawyers who file lawsuits against customers who have refused to pay the collection agency. 

Agencies That Buy Debt

When the original creditor has determined that it isn’t likely to collect, it will cut its losses by selling that debt to a debt buyer. Creditors package together numerous accounts with similar features and sell them as group. Debt buyers can choose from packages of accounts that are not that old and that no other collector has worked on yet, accounts that are quite old and that other collectors have failed to collect on, and accounts that fall somewhere in between. 

Debt buyers often purchase these packages through a bidding process, paying on average 4 cents for every $1 of debt face value. In other words, a debt buyer might pay $40 to purchase a delinquent account where the balance owed is $1,000. The older the debt, the less it costs, since it is less likely to be collectable.

The type of debt also influences the price; mortgage debt is worth more, while utility debt is worth less. Debt buyers keep everything they collect; because they have purchased the debt from the original creditor, they don’t send any of the amount collected to that creditor. 

Debt collectors get paid when they recover a delinquent debt; the more they recover, the more they earn. Old debt that is past the statute of limitations or is otherwise deemed uncollectable is bought for pennies on the dollar, making collectors big profits.

What Debt Collectors Do

Debt collectors use letters and phone calls to contact delinquent borrowers and try to convince them to repay what they owe. When debt collectors can’t reach the debtor with the contact information provided by the original creditor, they look further, using computer software and private investigators. They can also conduct searches for a debtor’s assets, such as bank and brokerage accounts, to determine a debtor’s ability to repay. Collectors may report delinquent debts to credit bureaus to encourage consumers to pay, since delinquent debts can do serious damage to a consumer’s credit score

A debt collector has to rely on the debtor to pay and cannot take a paycheck or reach into a bank account, even if the routing and account numbers are known, unless a judgment is obtained, meaning that the court orders them to repay a certain amount to a particular creditor. To do this, a collection agency must take the debtor to court before the statute of limitations runs out and win a judgment against him or her. This judgment allows a collector to begin garnishing wages and bank accounts, but the collector must still contact the debtor's employer and bank to request the money.

Debt collectors also contact delinquent borrowers who have already had a judgment against them,  Even when a creditor wins a judgment, it can be difficult to collect the money. Along with placing levies on bank accounts or motor vehicles, debt collectors can try placing a lien on property or forcing the sale of an asset.

How Reputable Collectors Operate

Debt collectors have a bad reputation for harassing consumers. More consumers complain to the Federal Trade Commission about debt collectors than about any other industry. The Fair Debt Collection Practices Act limits how collection agencies can collect a debt in order to keep them from being abusive, unfair and deceptive, and there are debt collectors who are careful not to violate consumer protection laws. Here’s what you can expect from a reputable collector.

In contacts with debtors, a collector who behaves properly will be fair, respectful, honest and law-abiding. After you make a written request for verification of a debt you've been contacted about, the collector will suspend collection activities and send you a written notice of the amount owed, the company you owe it to and how to pay it. If the collector can’t verify the debt, the company will stop trying to collect from you. It will also tell the credit bureaus that the item is disputed or request that it be removed from your credit report. If the collector is working as a middleman for a creditor and doesn’t own your debt, it will notify the creditor that it has stopped trying to collect because it couldn’t verify the debt. 

Collectors must also follow certain time limits, such as not reporting a debt that is more than seven years old and sending a debt validation letter within five days of first contact with the debtor.

Reputable debt collectors will try to obtain accurate and complete records so they don’t pursue people who don’t really owe money. If you tell them the debt was caused by identity theft, they will make a reasonable effort to verify your claim. They also won’t try to sue you for debts that are beyond the statute of limitations. They will not harass or threaten you or treat you differently because of your race, sex, age or other characteristics. They will not publicize any debt you owe or try to deceive you in order to collect a debt, nor will they pretend to be law enforcement agents or threaten you with arrest. They also won’t contact you before 8:00 a.m. or after 9:00 p.m. without your permission to do so.

To learn more about what debt collectors are not allowed to try on you, read 5 Things Debt Collectors Are Forbidden To Do.

The Bottom Line

Debt collection is a legitimate business, and if a debt collector contacts you, it’s not necessarily the beginning of an abusive relationship. Many  collectors are honest people who are just trying to do their jobs and will work with you to create a plan to help you repay your debt, whether that means a payment in full, a series of monthly payments or even a reduced settlement.

You should of course put up your guard  when a collector contacts you, and you should know your rights and understand what debt collectors are and aren't allowed to do. But if you know a bit about how the business works, you might be able to resolve your delinquent debt amicably.

One cautionary note: Debts fall under a statute of limitations. If you think this could be an issue in your situation, do not admit to the debt or discuss any settlement without legal advice; taking even the smallest step could void the statute of limitations and restart the clock. See Do I still owe debt collectors for a debt that's past the statute of limitations for my state?

Read more: How the Debt Collection Agency Business Works | Investopedia
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Posted by Anne James on January 16th, 2018 7:54 AM


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