Department of Corporations

1. Department of Corporations SAFE/Senate Bill 36 Secure and Fair Enforcement Mortgage Licensing Act of 2008 NMLS National Mortgage Licensing System Presented by: Louisa Broudy, Deputy Commissioner DiAun Burns, CRMLA Special Administrator Patricia Speight, CFLL Special Administrator

2. Departmentof Corporations Discussion Topics • When NMLS Will Be Used By DOC Licensees • Accessing NMLS • Forms to Complete • MLO License Requirements • Resources

3. Department of Corporations When to use NMLS • Transition existing DOC licensees onto NMLS • Process all CRMLA license applications • Process CFLL license applications for those companies that make or broker loans secured by residential real estate • Process MLO applications

4. Department of Corporations Accessing NMLS • http://mortgage.nationwidelicensingsystem.org/Pages/default.aspx • Begin with “Getting Started with NMLS” • Companies must complete a Company Account Request Form. If your company already has access to NMLS, you do not need to complete this step. • MLOs should begin by discussing filing requirements with their employer. An MLO will create an individual account and then begin the application process.

5. Department of Corporations Forms to Complete • MU 1 – Company Record • MU2 – Control Person • Executive Officer, Director, Shareholders, Branch Manager and Qualified Individuals. Qualified Individuals include any person responsible for lending activities in the state. • MU3 – Branch Record • MU4 – MLO Record

6. Department of Corporations Transition and Licensing • NMLS Filings for Transitioning and Licensing • CRMLA licensees and CFLL licensees that make or broker loans secured by residential real estate must complete company MU1 • Officers, directors, shareholders and qualified individuals will be required to file MU2 • Establish branch license on NMLS system-MU3 filing

7. Department of Corporations Definition-MLO • MLO – Mortgage Loan Originator is a person: • Who takes Residential Mortgage Loan Applications; or • Who negotiates terms of a residential loan • And will be compensated for arranging the loan • Residential Loan • Secured by real property with a dwelling • Dwelling is a residential structure (1-4 units) • Includes mobile home or trailer if it is used as a residence

8. Department of Corporations MLO license requirement • A. Filing of Form MU4 and Sponsorship in NMLS by a company licensed by the DOC that holds a valid unique identifier with NMLS.

9. Department of Corporations MLO license requirement B. Pre-license education-20 hours or Certification by DRE or another state agency.The DOC, in conjunction with the DRE, will certify compliance with the pre-license education requirements for those applicants that apply only to the DOC for an MLO license. The certification will be that the pre-license education requirement has been satisfied based on the education completed to obtain their DRE license. 3 hours Federal Law and Regulations 3 hours Ethics 2 hours Nontraditional Mortgage Products 12 Hours of Elective Topics Completion of courses is not a prerequisite to take an exam Course providers are listed on NMLS Resource Center and must be approved by NMLS

10. Department of Corporations MLO license requirements • C. Passing score on National and CA State Test • Test must be taken through test providers approved by NMLS. Visit “Testing” page on NMLS Resource Center for test content outlines and information about enrolling in a test session. • An individual who fails a test may retake the test up to 3 consecutive times with at least 30 days passing between each retesting. An applicant who fails 3 consecutive retests must wait at least 6 months before retesting.

11. Department of Corporations MLO license requirement D. Background Check • Fingerprint Requirement • Process begins with on-line application filing • Appointments scheduled • Fee $39 • MLO Application Denied if applicant has: • Felony conviction in past 7 years • MLO License previously revoked in another jurisdiction • Life time ban for felonies involving: • Fraud Breach of trust • Dishonesty Money laundering

12. Department of Corporations MLO license requirement D. Background Check • Credit Reports • Applicants will be required to authorize a credit report through NMLS between October 2010 and March 1, 2011 • DOC has adopted Regulations – available on our website Review for financial responsibility will include: • Responses to disclosure questions on application • No FICO • Liens and judgments for: • Fraud • Misrepresentation • Dishonest dealing • Mishandling of trust funds

13. Department of Corporations Application Filing-General Info • DOC Transition Year – 2010 • MLO Licenses must be received by July 31, 2010. • Complete all requirements and file application by May 28, 2010 for license to be issued by July 31, 2010. • Filing Guidelines • Detailed filing instructions on DOC and NMLS web sites • Use DOC public records when completing applications –go to Financial Services Licensee Listing on our home page. • Licensees must keep DOC and NMLS records in sync

14. Department of Corporations Resources • Department of Corporations • Web site - www.corp.ca.gov Includes direct links to NMLS Resource Center and Consumer Access Will include Frequently Asked Questions and Answers • Licensing Questions – 866 ASK CORP (866 275-2677) • NMLS Resource Center - http://mortgage.nationwidelicensingsystem.org/Pages/default.aspx • Licensees Tab: • Quick guides • Tutorials - Navigation Guides • Sample Forms – MU1, MU2, MU3, & MU4 • Policy Guidebook • NMLS Call Center – 240 386-4444