SAFE Act California Mortgage Loan Originators MLO Textbook and Study Guide

TABLE OF CONTENTS

INTRODUCTION AND OVERVIEW 6
Lenders/Mortgage Banker-DOC Licensees 6
Mortgage Broker-DRE Licensees 6
National Licensing Requirements 6
MLO – STATE TEST COMPONENT 7

I. CALIFORNIA DEPT OF CORPORATIONS OR DEPT OF REAL ESTATE 7
Regulatory Authority – Overview of two Agencies 7

II. CALIFORNIA LAW AND REGULATION DEFINITIONS 10
A. Real Estate Law and Subdivided Lands Law 10
B. Regulations of the Real Estate Commissioner 11
C. Administrative Procedure Act 11
Other Business and Professions Code and Government Code      11
D. The California Residential Mortgage Lending Act (CRMLA) 11
California Residential Mortgage Lending Act (CRMLA) 12
E. The California Finance Lenders Law CFC § 22001 14
CFC (Division 9, Sections 22000 through 22780) 14
Disciplinary Actions 17
F. California Civil Code Section 51 18
G. Penal Code (Sections 585 through 830.11) 18
H. California Financial Code (Sections 4970 thru 51015) 19
I. Government Code Section 12955-12956.2 19
J. Health and Safety Code (Section 35800 through 35833) 19

III. CALIFORNIA LICENSE LAW AND REGULATION (25%) 20
A. Persons required to be licensed 20
B. Licensee qualifications and application process 21
California Licenses to Originate Real Estate Loans 23
C. Grounds for denying a license Error! Bookmark not defined    34
D. License maintenance 35
Books and Records: Standard for Keeping. 39
Criteria of Rehabilitation (Revocation or Suspension). (BPC 2912) 42
Mortgage Loan Originator Endorsement required 43
Mortgage Loan Activity Reporting Requirement 44

IV. COMPLIANCE (50%) 44
A. Prohibited conduct and practices (CFC 50204) 44
B. Required conduct 49
C. Fees and charges 51
D. Disclosures and agreements 52
E. Advertising 53
F. Trust account requirements 59

V. DISCIPLINARY ACTION (10%) 60
License Grace Period 64
License Reinstatement After Disciplinary Action 64
A. Notifications, hearings, and appeals 64
BUSINESS AND PROFESSIONS CODE 21 64
Statute of Limitations – Real Estate Licensees 65
Jurisdiction over a Lapsed or Suspended License 65
B. Suspension, revocation, and rescission of licenses 65
Disciplinary Action against Licensee 67
C. Penalties/fines 70
D. Civil and criminal liability 71
CONCLUSION 72

Appendix #1: DEFINITIONS OF TERMS 73
Appendix #2: MLO CA STATE STUDY GUIDE REFERENCES 77
Appendix #3: LAW LINKS 78
Appendix #4: CALIFORNIA Content Outline 81
Appendix #5: California Provided Reference List 84