The California Department of Business Oversight, Financial Services Division oversees the licensure and regulations of several areas, including: mortgage and other non-bank lenders, payday lenders, mortgage servicers, escrow agents and escrow companies and other financial service providers.
Mortgage loan originators, which include mortgage lenders, are people that receive compensation or gain for a residential mortgage application, offer, or negotiates terms of a residential mortgage loan.
The California Residential Mortgage Lending Act (CRMLA) Division 9 of the California Financial Code, Article 3, Section 22100 defines the licensing of mortgage loan originators, which includes mortgage lenders.
License requirements for mortgage lenders are:
1. Complete the application through the NMLS system and pay the applicable filing fee.
2. Submit the Checklist along with agency specific requirement attachments to the Department of Business Oversight NMLS Licensing Unit within five business days.
3. Provide copies of the following if applicable: a Certificate of Filing from the county clerk in which the fictitious business name was filed, if any questions answered “Yes” on the disclosure statement, provide supporting documents, Certificate of Authority or Good Standing Certificate obtained from the California Secretary of State, partnership agreement, an organizational chart if owned by another entity, entities, or persons, subsidiaries, or affiliated entities, explain any other business activities.
4. Provide an audited financial statement prepared by a CPA, as of the company’s most recent fiscal year end or a more recent date. The financial statement must reflect a minimum tangible net worth of $250,000.
5. Provide a Business Plan as to how business will be conducted. If applicant is a residential mortgage loan servicer, include a mitigation program in the event of a loss.
6. Provide a Management Chart that includes offices, managers, and divisions.
7. Provide evidence of federal agency approval to engage in business of loans for FHA, VA, Fannie or Ginnie Mae, Freddie Mac, or Farmers Home Administration.
8. Submit fingerprint cards for each control person filing an NMLS individual form.
9. Complete the Customer Authorization of Disclosure of Financial Records form. If executed in a state other than California, the form must be notarized. 10. Obtain a fidelity bond and submit a copy of the policy with the application.
11. Obtain a $50,000 surety bond.
SuretyGroup.com can help you obtain the proper fidelity bond and surety bond for your business. Premiums for California mortgage lender surety bonds are dependent credit. Premiums for fidelity bonds are dependent on the number of employees covered, bond amount and the number of years of coverage.
California mortgage lender licenses must be renewed annually by December 31.
Hours: 8:00-5:00 CST, Monday through Friday