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:
http://jobs.mpamag.com/jobs/mortgage-loan-originators-15558.aspx
 
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
Posted in:General and tagged: CFPB
Posted by Anne James on February 1st, 2017 6:36 AM

By Paul Muolo

pmuolo@imfpubs.com

Thanks to the "Brexit" vote, the yield on the benchmark 10-year Treasury bond keeps falling, but mortgage brokers have noticed that their wholesale partners haven’t cut rates very much, at least not yet.

“Some have cut their rates, but not a huge amount considering that the yield [on the 10-year] went from 1.68 percent to 1.48 percent,” said Brian Benjamin, who runs Two River Mortgage & Investment in Red Bank, NJ. “Even so, at the end of the day everyone will tell you LLPAs [loan-level price adjustments] are still a major factor as many loans have lower downpayments.”

Marc Savitt, president of The Mortgage Center, Martinsburg, WV, said he didn’t see any wholesale cuts in rates on Friday and not much on Monday morning either. “Not yet,” he said.

Andrew Peters, CEO of First Guaranty Mortgage Corp., a retail and wholesale funder, said his shop is staying the course for now. He noted that FGMC is “focusing more on making sure we have the proper risk controls in place to deal with the market volatility over the coming months.”

Other areas of interest: Originations, Secondary/MBS, Mortgage Lending & Servicing, Trends & Profitability

Posted in:General and tagged: Refinancelower rate
Posted by Anne James on June 27th, 2016 11:10 AM
Posted in:General and tagged: House Buying
Posted by Anne James on June 6th, 2015 10:25 AM
A generational smart take looks at the various reasons that first-time homebuyers – mostly Millennials – aren’t buying and says student debt and meager income is a big factor.

Nomura’s note to clients has a take few have offered: The first time homebuyers are holding out and it’s not student debt, a shift away from homeownership as a choice by Millenials, or any of that.

“One lingering concern is that many conventional home buyers that need mortgage financing for purchasing homes haven’t been entering the housing market as the share of first-time home buyers of existing home sales dropped 2pp to 27% in May and mortgage applications are still subdued,” Nomura says.

Analysts say it’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.

It’s that they think they’re not qualified or that they don’t have a big enough down payment.

Applying for a mortgage is as uncomfortable and probing as a colonoscopy for some people. That’s even people who know they have great credit.

But with all the talk that makes its way out of the trade space and onto the street, the average buyer has heard vague talk about tightened credit boxes, QM rules, ATR rules, and so on – and what they think is that the colonoscopy scope just got bigger and now there’s an audience for the procedure.

That makes for, well...

There’s not as much talk making its way to buyers that the credit box has actually expanded.

Furthermore, barely a week ago, Freddie Mac put out an appeal to potential buyers to explain no, the down payment requirements aren’t as bad as most think. As HousingWire reported, potential homebuyers seem significantly unaware that more than one in five borrowers who took out conforming, conventional mortgages this year put down 10% or less.

The problem is, these potential homebuyers are sidelining themselves. They don’t want the embarrassment or heartbreak of a refusal, so they either stick with their apartment for a while longer, or stay in the house they’ve outgrown.

Posted in:General
Posted by Anne James on June 28th, 2014 9:06 AM

Fannie Mae is offering up to a 3.5% incentive for owner-occupant buyers who request the incentive at their initial offer during the First Look period, purchase a HomePath property in select states on or before April 30 and close on or before June 30, 2014.*

To be eligible for this incentive:

  • All actively listed properties in select states** are eligible.
  • Buyers or their agents must request closing cost assistance at initial offer.
  • Initial offers must be submitted on or after February 14, 2014, but not later than April 30, 2014.
  • Property sales must close on or before June 30, 2014.
  • Buyers must reside in the home as their primary residence or be a public entity — auction, pool and investor sales are excluded.
Posted in:General
Posted by Anne James on April 7th, 2014 2:22 PM

Closing cost assistance is available for your buyers. Act now...offer ends soon!

Fannie Mae is offering up to a 3.5% incentive for owner-occupant buyers who request the incentive at their initial offer during the First Look period, purchase a HomePath property in select states on or before March 31 and close on or before May 31, 2014.*

To be eligible for this incentive:

  • All actively listed properties in select states** are eligible.
  • Buyers or their agents must request closing cost assistance at initial offer.
  • Initial offers must be submitted on or after February 14, 2014, but not later than March 31, 2014.
  • Property sales must close on or before May 31, 2014.
  • Buyers must reside in the home as their primary residence or be a public entity — auction, pool and investor sales are excluded
Posted in:General
Posted by Anne James on February 18th, 2014 3:08 PM

Did You Know?

Seller Credits Allowed by Loan Type

Conventional Loan

Occupancy

LTV

Allowable Credit

Primary Residence / 2nd Home

Conforming Loan Amount

90.01% - 95.00%

3%

75.01% - 90.00%

6%*

75% or less

9%*

Primary Residence / 2nd Home

Conforming Loan Amount

All LTV / CLTV

3%

Investment

All LTV / CLTV

2%

Seller Credits can be applied to all closing costs and/or prepaid items not to exceed the actual amount of the closing costs.

*Conforming Hi Balance is restricted to 3% seller credit at ALL LTVs.

FHA Loan

Occupancy

LTV

Allowable Credit

Primary Residence

All LTVs

6%

Seller Credits can be applied to all closing costs and/or prepaid items not to exceed the actual amount of the closing costs.

VA Loan

Occupancy

LTV

Allowable Credit

Primary Residence

All LTVs

4% not including unallowable fees

Seller Credits can be applied to all closing costs and/or prepaid items not to exceed the actual amount of the closing costs. Borrower may receive funds back equal to or less than any amount deposited into escrow for the earnest money.

This "Did You Know" was brought to you by your

Trusted Advisor and Mortgage Broker

Anne James| 562 320-0510

Posted in:General
Posted by Anne James on April 13th, 2012 9:34 AM

FOR IMMEDIATE RELEASE

Contact: Evan Gerberding

Phone: 916.326.8602

Fax: 916.322.2345

egerberding@calhfa.ca.gov

www.KeepYourHomeCalifornia.org

CalHFA Reports $2 Billion Effort to Assist Homeowners Struggling to Remain in Homes Is Going Unused

 

SACRAMENTO – The California Housing Finance Agency reports funds for four programs to to help homeowners with the funds to

 help families remain in their homes, help during unemployment and catch up on payments is going unused and remain availabe since 2009.

The programs, under the umbrella title of Keep Your Home California, are federally funded as

part of the U.S. Treasury Department’s Hardest Hit fund, and are aimed at helping low and moderate income homeowners struggling to pay their mortgages amid the worst real estate crisis ever.

“Our goal is to get the very most out of these federal dollars to assist California families,” said

Steven Spears, Executive Director of CalHFA. “With families struggling through a number of

financial hardships and the disruption in the real estate market, these programs will help those

in need while stabilizing neighborhoods and communities severely impacted by foreclosures.”

California received a total of nearly $2 billion through the Hardest Hit fund. After consulting with

community leaders throughout the state, four programs were created to assist California

families.

Mr. Spears said that all four programs are intended to help avoid foreclosure: three offer several

forms of mortgage assistance, as well as a separate program that will provide transition

assistance to borrowers who execute a short sale or deed in lieu transaction.

All of the programs are designed specifically for low or moderate income homeowners who are

either unemployed or are facing another financial hardship, have fallen behind on their

mortgages and owe significantly more than the value of their homes.

“In partnership with the federal government, Keep Your Home California is one more step we

are taking to help low and moderate income California families who are struggling to remain in

their homes,” said Assemblymember Norma Torres, Chair of Assembly Committee on Housing

and Community Development. “No one program will solve the foreclosure crisis affecting our

state, but together we hope to make a difference for as many families as possible.”

"The foreclosure crisis continues to hinder our potential for economic recovery, and strips

stability from our communities,” said Assemblymember Mike Eng, Chair of the Assembly

Committee on Banking and Finance. “I'm pleased that the Keep Home California program is

ramping up to address these challenges and, as the program moves forward, I will continue to

monitor its progress to ensure that it's an all around success at assisting California borrowers."

Specifically, the Keep Your Home California programs provide:

Mortgage assistance of up to $3,000 per month for unemployed homeowners who are in

imminent danger of defaulting on their home loans or need help catching up

with a modified loan arrangement.

Funds to help homeowners who have fallen behind on their mortgage payments due to a

temporary change in a household circumstance. The program will provide up to $15,000

per household to reinstate mortgages to prevent foreclosures.

 

Money to reduce the principal owed on a mortgage for a home where the low or

moderate income homeowner is facing a serious financial hardship and owes

significantly more than the home is worth. The program requires lenders to match any

assistance provided by the Keep Your Home California program.

A full description of the programs can be found at www.KeepYourHomeCalifornia.org

 

How to Apply:

The programs will be limited to homeowners who meet a number of criteria, including owning

and occupying the home as their primary residence, meeting income limits and facing a financial

hardship. Homeowners who consummated a “cash-out” refinance are not eligible for Keep Your

Home California programs.

To apply for the assistance, a homeowner should contact the Keep Your Home California call

center toll-free at 888.954.KEEP(5337) or their mortgage servicer – the company to which the

borrower sends monthly mortgage payments. Each of the mortgage assistance programs

requires the participation of the mortgage servicer.

As of February 9, the following servicers are participating in all four Keep Your Home California

programs:

? GMAC

? Guild Mortgage

? California Housing Finance Agency

? California Department of Veterans Affairs

Other servicers, including Bank of America, JPMorgan Chase, CitiMortgage and Wells Fargo

are currently participating in some, but not all programs at this time. The list of participating

servicers is expected to expand in the coming weeks.

Full details regarding servicer participation can be found at www.KeepYourHomeCalifornia.org.

“The problems of unemployment and the unprecedented disruption in our real estate markets

have impacted so many families,” Mr. Spears said. “These programs are designed to move

homeowners who have been told ‘no’ into the ‘yes’ category and qualify them for a mortgage

they can afford over the long term.”

Borrowers with questions about the program may call Keep Your Home California toll-free at

888-954-KEEP(5337).

Posted in:General
Posted by Anne James on February 19th, 2011 7:17 AM

FOR IMMEDIATE RELEASE

Contact: Evan Gerberding

Phone: 916.326.8602

Fax: 916.322.2345

egerberding@calhfa.ca.gov

www.KeepYourHomeCalifornia.org

CalHFA Announces Full Implementation of $2 Billion Effort

to Assist Homeowners Struggling to Remain in Homes

 

SACRAMENTO – The California Housing Finance Agency today announced the full

implementation of four programs to fight the ongoing foreclosure crisis in California, with the

primary goal to help families remain in their homes.

The programs, under the umbrella title of Keep Your Home California, are federally funded as

part of the U.S. Treasury Department’s Hardest Hit fund, and are aimed at helping low and

moderate income homeowners struggling to pay their mortgages amid the worst real estate

crisis in decades.

“Our goal is to get the very most out of these federal dollars to assist California families,” said

Steven Spears, Executive Director of CalHFA. “With families struggling through a number of

financial hardships and the disruption in the real estate market, these programs will help those

in need while stabilizing neighborhoods and communities severely impacted by foreclosures.”

California received a total of nearly $2 billion through the Hardest Hit fund. After consulting with

community leaders throughout the state, four programs were created to assist California

families.

Mr. Spears said that all four programs are intended to help avoid foreclosure: three offer several

forms of mortgage assistance, as well as a separate program that will provide transition

assistance to borrowers who execute a short sale or deed in lieu transaction.

All of the programs are designed specifically for low or moderate income homeowners who are

either unemployed or are facing another financial hardship, have fallen behind on their

mortgages and owe significantly more than the value of their homes.

“In partnership with the federal government, Keep Your Home California is one more step we

are taking to help low and moderate income California families who are struggling to remain in

their homes,” said Assemblymember Norma Torres, Chair of Assembly Committee on Housing

and Community Development. “No one program will solve the foreclosure crisis affecting our

state, but together we hope to make a difference for as many families as possible.”

"The foreclosure crisis continues to hinder our potential for economic recovery, and strips

stability from our communities,” said Assemblymember Mike Eng, Chair of the Assembly

Committee on Banking and Finance. “I'm pleased that the Keep Home California program is

ramping up to address these challenges and, as the program moves forward, I will continue to

monitor its progress to ensure that it's an all around success at assisting California borrowers."

Specifically, the Keep Your Home California programs provide:

Mortgage assistance of up to $3,000 per month for unemployed homeowners who are in

imminent danger of defaulting on their home loans.

Funds to help homeowners who have fallen behind on their mortgage payments due to a

temporary change in a household circumstance. The program will provide up to $15,000

per household to reinstate mortgages to prevent foreclosures.

 

Money to reduce the principal owed on a mortgage for a home where the low or

moderate income homeowner is facing a serious financial hardship and owes

significantly more than the home is worth. The program requires lenders to match any

assistance provided by the Keep Your Home California program.

A full description of the programs can be found at www.KeepYourHomeCalifornia.org

 

How to Apply:

The programs will be limited to homeowners who meet a number of criteria, including owning

and occupying the home as their primary residence, meeting income limits and facing a financial

hardship. Homeowners who consummated a “cash-out” refinance are not eligible for Keep Your

Home California programs.

To apply for the assistance, a homeowner should contact the Keep Your Home California call

center toll-free at 888.954.KEEP(5337) or their mortgage servicer – the company to which the

borrower sends monthly mortgage payments. Each of the mortgage assistance programs

requires the participation of the mortgage servicer.

As of February 9, the following servicers are participating in all four Keep Your Home California

programs:

? GMAC

? Guild Mortgage

? California Housing Finance Agency

? California Department of Veterans Affairs

Other servicers, including Bank of America, JPMorgan Chase, CitiMortgage and Wells Fargo

are currently participating in some, but not all programs at this time. The list of participating

servicers is expected to expand in the coming weeks.

Full details regarding servicer participation can be found at www.KeepYourHomeCalifornia.org.

“The problems of unemployment and the unprecedented disruption in our real estate markets

have impacted so many families,” Mr. Spears said. “These programs are designed to move

homeowners who have been told ‘no’ into the ‘yes’ category and qualify them for a mortgage

they can afford over the long term.”

Borrowers with questions about the program may call Keep Your Home California toll-free at

888-954-KEEP(5337).

Posted in:General
Posted by Anne James on February 19th, 2011 7:15 AM

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