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Training Pro Flashcards

0
Q

Licensees under the residential mortgage lending act must file an annual financial report on:

A

March 1 each year

Licensees must submit an annual financial report that provides of the department with the information that it needs to calculate each licensees pro rata share of the department expenses. The report will address the calendar year that has just ended.
Reports are made under oath

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1
Q

Which California law requires that licensees notify the department within 30 days of beginning loan origination activities?

A

Real estate law

requires that broker licensees report loan origination activities within the 30 days

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2
Q

And applicants current income is not a factor that the department of business oversight will consider in order to determine whether an applicant is financially fit. true or false?

A

True

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3
Q

Under the residential mortgage lending act which form or forms must be submitted as part of a mortgage lender application assuming no branch office

A

Applicants for a lender or servicer license must submit forms MU1 and MU2

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4
Q

What is the difference between the net worth requirements for the finance lenders law for a company with no employees and a company with one mortgage loan originator employee?

A

$25,000 for a company with no employees

$250,000 for a company with at least one MLO employee

Which means that the difference is $225,000

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5
Q

The finance lenders law requirements for the initial surety bond and the net worth requirement for licensing are lower than the same requirements for the residential mortgage lending act true or false?

A

True

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6
Q

If recovery is made on a bond, licensees have how many days to post a new surety bond?

A

Lenders and mortgage servicers are required, by law, to file a new bond as soon as recovery is made on an existing bond.

Licensees must file a new bond within 10 days after payment on the bond.

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7
Q

Pursuant to the regulations of the real estate commissioner, mortgage professionals are required to adopt:

A

Policies and lending practices for nontraditional and subprime mortgage products

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8
Q

Which forms must a mortgage servicer submit to obtain a license under the finance lenders law, if it has no branch office?

A

Servicers cannot be licensed under the finance lenders law

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9
Q

The finance lenders law fFLL) licenses:

A

Mortgage lenders

Mortgage brokers

MLOs

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10
Q

What form must an applicant file who wants a license for a branch office under the FLL?

A

Form MU3

Is required for a branch office under the finance lenders law

The same form is required for a branch office license under the residential mortgage lending act

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11
Q

Under the RMLA, when the commissioner issues cease and desist order because the person is operating without a license, and the person has requested a hearing, how long does the commissioner have to hold the hearing after the request has been made?

A

60 days

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12
Q

Under the RMLA required conduct provisions, which of the following must be reported to the commissioner within five days?

A

Bankruptcy files

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13
Q

Who is required to obtain an endorsement under the real estate law?

A

A broker licensed under the real estate law who receives compensation from a mortgage loan originator

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14
Q

If a loan transaction does not go to settlement by the contracted date, any funds in escrow must be refunded to the buyer within:

A

15 days

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15
Q

The finance lenders law has less onerous financial responsibility requirements are RMLA, true or false ?

A

True

The FLL requirements for the initial surety bond and the net worth requirement for licensing are lower then the same requirements for the residential mortgage lending act

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16
Q

What is the purpose of a mortgage loan originator endorsement under the real estate law?

A

To allow real estate brokers to take on loan origination activities

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17
Q

If a licensee maintains records out-of-state it must respond to the commissioners request for these records within:

A

10 days

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18
Q

Licensees may not include the term escrow unless doing businesses under a fictitious name unless:

A

The term specifically states “a non-independent broker escrow”

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19
Q

The RMLA does NOT apply to brokers, true or false ?

A

True

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20
Q

The FLL, which does apply to brokers, contains the same broker licensing requirements as the Real Estate Law?

True or false ?

A

False

The requirements are different

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21
Q

Although the Real Estate Law did not originally apply to MLOs, it was amended to include MLO endorsements. True or false ?

A

True

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22
Q

What is the primary difference between the RMLA and the FLL in terms of the persons that must be licensed?

A

RMLA licenses mortgage lenders, mortgage servicers, and MLOs.

The FLL licenses mortgage lenders, mortgage brokers, and MLOs.

The difference is that the RMLA licenses mortgage servicers and the FLL licenses mortgage brokers.

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23
Q

How many loans per year could a licensee sell to a person that is not an institutional lender without violating the RMLA?

A

8

A licensed a lender is said to be making loans beyond the parameters of the RMLA when it sells more than eight loans per year

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24
Q

Licensees of that receive a notice of the commissioners intention to suspend their licenses for 12 months are:

A

Immediately bared from engaging in mortgage lending activities

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25
Q

Which of the following is an accurate statement about a comparison between the application process for an endorsement under the real estate law and the application process for a license as an MLO?

A

Both processes use form MU4

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26
Q

Finance lenders licensed under the FLL are not defined by the RMLA as an “institutional lender” true or false ?

A

True

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27
Q

If a licensee is convicted of embezzlement, what is the difference in reporting requirements between the RMLA and the FLL?

A

The RMLA regulations require immediate notice for a conviction for embezzlement.

The FLL allows 20 days

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28
Q

If a licensee under the RMLA is served with a notice of license suspension or revocation for failing to make a timely payment of an annual assessment, it must request a hearing within how many days of service of the order?

A

15 Days

Failure to request a hearing within the 15 day period constitutes a waiver of the right to a hearing.

The Commissioner must schedule a hearing within 30 days of the receiving the request for a hearing

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29
Q

Can the commissioner revoke a license under the RMLA if the licensee violates the Fed Truth-in-Lending Act during a loan closing?

A

Yes

The law gives the commissioner such authority.

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30
Q

Why does the RMLA prohibit licensees from advertising themselves as mortgage brokers?

A

Because the law does not offer mortgage broker licenses.

The Act does not apply to mortgage brokers.

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31
Q

Under the FLL, an applicant states their mailing address as 123 Main Street, which was an unintentional mistake. What is likely to occur?

A

The commissioner will issue a notice of deficiency.

Cal.Fin.Code 22109(b) gives the commissioner the right to deny an application if the applicant fails to respond to a notice within 90 days.

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32
Q

For what activity is it least likely to require a mortgage loan originator license under the RMLA?

A

Renegotiating an existing mortgage loan

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33
Q

The RMLA does not require a licensee to submit a financial statement that was prepared by an independent certified public accountant within three weeks of the proposed change of control in order to change the control of its business, true or false?

A

True

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34
Q

The RMLA requires that a licensee take all of the following steps in order to change the control of its business:

A

Provide prior notice to the DOB

Pay an investigation fee of $100

Submit an application for change of control to the DOB

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35
Q

The regulations of the real estate commissioner require that which of the following is provided to borrowers of traditional loan products?

A

Form RE882

The BRE has issued a Mortgage Loan Disclosure Statement which can be downloaded from it’s website.

The form is intended as a disclosure for borrowers when the loan product they have applied for does not allow principal or interest to be differed.

Specifically it is referred to borrowers of traditional loan products.

36
Q

Suppose that in it’s first year of operations, a company’s aggregate amount of residential mortgage loans is $750,000. Under the FLL, what is it’s surety bond in year two?

A

$25,000

Surety bond requirements increase in year two, based on performance in year one. In this scenario, how ever, the initial $25,000 surety bond does not increase until the licensee does at least $1 million in mortgage loans. Therefore, the surety bond in year two is $25,000.

37
Q

Under the RMLA, which form or forms must be submitted as part of a mortgage lender application, assuming no branch office ?

A

MU1 and MU2

Applicants for a lender or servicer
license must submit forms MU1 and MU2

38
Q

What is not a function of a regulation?

A

To supersede a law where an ambiguity exists

39
Q

What is the purpose of a regulation?

A

To provide additional detail or guidance as outlined in the law.

40
Q

What is the max penalty under the RMLA for someone whose business cards claim he is an expert in non traditional mortgages when, in fact, he has no such expertise?

A

Commissioner bars him from his job.

The commissioner has the right to suspend a licensee for up to 12 months or bar a person from their job for holding them selves as having specialized skills they do not actually have.

41
Q

Which California law requires that licensees notify the department within 30 days of beginning loan origination activities?

A

The Real Estate Law

42
Q

The application fee for a mortgage lender under the Residential Mortgage Lending Act is ?

A

$1,100

43
Q

California Business and Professions Code specifies that sales contracts for real estate must include:

A

Legal description of the property

Any encumbrances that are outstanding as of the date of the contract

The terms of the contract

  • Does not include a rescission clause
44
Q

California laws that include anti-discrimination provisions:

A

California government Code

California Civil Code

Regulations of the Real Estate Commissioner

45
Q

California law that does not include anti-discrimination provision?

A

Subdivided Lands Law

46
Q

What is the protected category list under the Unruh Civil Rights Act?

A

National Origin
Sexual Orientation
Marital Status

  • Gender identity is not of this list
47
Q

Under the RMLA, a licensee who surrenders it’s license cannot resume residential mortgage lending activities using it’s real estate license unless it has been licensed for at least how many years under the RMLA?

A

5 years

48
Q

What is not a requirement for opening a branch office for a finance lender?

A

Using an MU2 form to provide personal and financial information about each individual who will be employed in the new office

49
Q

What are the requirements for opening a branch office for a finance lender?

A

Notifying the commissioner of the person selected to oversee lending activities in the new office.

Submit the application for a branch office at least 10 days prior to conducting business at the new location.

Paying an application fee of $320

50
Q

What are the continuing education requirement for mortgage brokers under the FLL ?

A

None

FLL contains no continuing edu for brokers but it does for MLOs

51
Q

What is the application fee for mortgage lenders and servicers ?

A

$1,000

*including NMLS fee

52
Q

Both the NMLS and the state collect application fees, true or false ?

A

True

53
Q

The annual assessment that a licensed mortgage lender or servicer must pay, as required by the RMLA is ?

A

The lesser of a pro rata share, calculated by the commissioner, or $5,000

*after calculating the amount if assessments that it needs to receive, the Department will charge lenders and mortgage servicers the lesser of their pro rata share if the expenses that the Commissioner expects to incur in the current fiscal year, with the licensees annual financial reports used to calculate their pro rata shares, or $5,000.

54
Q

Only the DOB is responsible for enforcing the RMLA true or false ?

A

True

55
Q

What is information that is required to be “fully and clearly” displayed in advertisements under the RMLA ?

A

Rates of interest

Charges

Cost of loans

  • the name if the lender is not required
56
Q

Which California law requires that licensees notify the department with in 30 days of beginning loan origination activities ?

A

Real Estate Law

57
Q

Under the FLL, when does a license surrender become effective ?

A

30 days after the application for surrender is filed

58
Q

Is a licensee under the Real Estate Law required to get approval from the DOB for advertisements of mortgage lending activities ?

A

No

Broker licenses under the Real Estate Law are issued through the Bureau of Real Estate, not the DOB. Under Cal.Bus. & Prof. Code 10232.1, broker licensees are required to submit advertisements, but to the Bureau of Real Estate, not the DOB.

59
Q

If the licensee tries to file the renewal application two days after the dead line, what is the likely result ?

A

The licensee will have to pay another $100

  • FLL and RMLA permit the licensee to seek immediate reinstatement if the license provided that all other conditions are met, the request is made before March 1, and the licensee pays a $100 reinstatement fee.
60
Q

The cost of examinations are not covered by pro rata fees collected from annual assessments, true or false ?

A

True

61
Q

Originating a high-cost mortgage loan is not permitted by the RMLA, true or false ?

A

False

*Cal.Fin. Code 50700 prohibits licensees from obtaining or attempting to obtain a high-cost mortgage

62
Q

An individual working under the supervision of licensee may provide factual information about loan terms without being licensed themselves?

A

Yes, as long as the individual does not provide counseling or advice to the borrower

63
Q

Which law or act addresses loan modification in California ?

A

The California Foreclosure Preventions Act

  • it describes the minimum requirements for loan modification programs, including the right of a mortgage servicer to obtain exemption from certain portions of the California Civil Code.
64
Q

Suppose that a licensee under the FLL submits a branch office application on March 5. Upon hearing nothing from the commissioner, the license opens the branch office on March 16. What are the commissioners rights at this point regarding the branch application?

A

The commissioner has 90 days from the date of the application to approve or deny the person designated to run the branch office.

65
Q

What are the continuing education requirements for endorsements under the Real Estate Law?

A

Endorsements require eight hours per year.

66
Q

Under the RMLA, which of the following is a recordkeeping requirements imposed on MLO’s?

A

Maintain a loan log for their call reports.

Not required to actually submit the report.

67
Q

What is not a requirement under the FLL for license maintenance?

A

Renewal requirements

68
Q

What are the requirements under the FLL for license maintenance?

A

Notice

Reporting

Record keeping

69
Q

What is a possible future development that licensees under the FLL and RMLA should be aware of?

A

Adoption of new regulations

70
Q

An “institutional investor” is defined under the RMLA to include all but which of the following ?

Depository lender
Non-depository lender
An individual
A real estate broker

A

Individual

  • this exceptionally broad term and encompasses every government entity, government agency, government sponsored enterprise, depository institution, non-depository lender, corporation, securities broker, real estate broker, and any other partnership, business, or association that can purchase or sell investments, including mortgage loans.
71
Q

When a business applies for a mortgage lender license, whose fitness is evaluated ?

A

Anyone with a controlling interest in the business.

The state will examine the fitness of any person controlling 10% or more of stock, any person that controls 25% or more of the election of the Board of Directors, and any person that significantly controls the management of the business.

72
Q

How does a licensed MLO satisfy the obligation to keep his or her application information current with the NMLS ?

A

The MLO must file a new MU4 with the NMLS

73
Q

NMLS fees are nonrefundable, but state fees are. True or false

A

True

74
Q

Which of the following is a valid reason under the RMLA for the commissioner to order that third parties stop disbursing trust find money to a licensee?

The licensee has failed to make proper disclosure

The licensee has hired an unlicensed MLO

The licensee is insolvent

There are no valid reason for taking such an action

A

The licensee is insolvent

  • the commissioner has the right to make such an order under several conditions, including if the licensee is insolvent, fails to meet the net worth requirement, or fails to meet the surety bond requirements.
75
Q

The application fee for an MLO is ?

A

$330

76
Q

Licenses for finance lenders are?

A

Are not subject to renewal requirements.

These licenses are valid until they are surrendered, suspended, or revoked.

In order to maintain a license it is necessary to pay annual assessments, submit to examinations by the commissioner, and meet notice, reporting, and record - keeping requirements.

77
Q

Which of the following is an accurate statement about about the reporting requirements for an individual who holds a MLO endorsement under the Real Estate Law?

A

He or she must file only a report of condition.

78
Q

An accurate statement about the California financial code ?

A

It includes the RMLA and the FLL

79
Q

I’m which decade did the RMLA go into effect?

A

1990’s

80
Q

How are license renewals different for mortgage lenders and mortgage servicers ?

A

Renewals are the same for both

81
Q

Applicants for a lender or broker license under the FLL must complete all but which of the following requirements in order to establish their financial fitness for a license?

Complete financial disclosure on MU1
form

Submit credit reports

Submit a financial statement

Obtain $25,000 surety bond

A

The surety bond requirement under the FLL is $25,000

82
Q

Under the Real Estate Law, what is the commissioners primary remedy if someone fails to pay a fine assessed against him or her?

A

Revoke or suspend the license

83
Q

If a licensee called the Burn Corp opens up a lending branch called burns Trust, has it violated the RMLA ?

A

Yes

Cal.Fin.Code 5006 prohibits licensees from using words such as “bank”, “trust”, “trustee”, and “loan association” in there names.

84
Q

When a licensee surrenders it’s license under the RMLA, which of the following is a correct statement or the law ?

A

Transfer of pending applications to another licensee is acceptable.

85
Q

Annual assessments under the RMLA are due:

A

With in 20 days of receipt of the assessment

September 30, commissioner will notify lender and Servicer of their of it’s assessment.

Failure to make payment can lead to a penalty of 1% of the assessment for each month that the payment is late.

Those who fail to make payment within 30 after payment is due are subject to immediate suspension or revocation

86
Q

What is not a requirement of the finance lenders law for license maintenance ?

A

Renewal requirements

Licenses issued under the FLL are not subject to renewal

87
Q

Administrative hearings to determine whether a license should be suspended are initiated by the filing of a:

A

Statement of charges

California (8 decks)

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