Section 1950.122.5 - Mortgage Loan Originator Application Procedures(a) ESTABLISHING A RELATIONSHIP IN NMLS: A licensed residential mortgage lender, mortgage servicer, or residential mortgage lender and servicer shall sponsor in NMLS each mortgage loan originator employed by it. To sponsor a mortgage loan originator, a residential mortgage lender, mortgage servicer, or residential mortgage lender and servicer applicant or licensee must:(1) Obtain a unique identifier through NMLS,(2) Obtain for its records, evidence that each mortgage loan originator meets the qualification requirements of Section 1950.122.5.1 of Subchapter 11.5 of these rules, and(3) Ascertain (by investigation) the character, business reputation and experience of any individual mortgage loan originator, prior to executing any transaction on behalf of the residential mortgage lender, mortgage servicer, or residential mortgage lender and servicer. Evidence of compliance with this paragraph shall be maintained as a part of the records of the licensee as required by Section 1950.314.4 of Subchapter 11.5 of these rules.(b) Upon the employment of an individual as a mortgage loan originator, a mortgage lender, mortgage broker, or mortgage lender and broker shall ensure that the mortgage loan originator files a Uniform Individual Mortgage License/ Registration & Consent Form (Form MU4) in NMLS for submission to the Commissioner and obtains a mortgage loan originator license. The notices set forth in Section 1950.122.8 of Subchapter 11.5 of these rules are part of every mortgage loan originator application.(c) A mortgage loan originator sponsorship is not approved until the Commissioner approves the sponsorship and issues the mortgage loan originator a license. A sponsorship will not be approved until the sponsoring residential mortgage lender, mortgage servicer, or residential mortgage lender and servicer has obtained a license through NMLS or has transitioned its license onto NMLS in accordance with Section 1950.122.4 of Subchapter 11.5 of these rules.(d) A mortgage loan originator applicant must complete all license requirements, including, but not limited to the payment of all required fees prior to transmitting the application to the Commissioner. The fee for an application as a mortgage loan originator is three hundred dollars ($300), which shall be paid through NMLS for transmission to the Commissioner, plus twenty dollars ($20) for the processing of a criminal history background check. The application fee shall constitute the mortgage loan originator's license fee for the remainder of the year in which a license is issued. The fees in this subsection are in addition to any fees required by NMLS, the Department of Justice, the Federal Bureau of Investigation, or any other party for the processing of criminal history background checks, credit reports, testing, education, or any other licensure requirement under the California Residential Mortgage Lending Act. As of January 1, 2011, the fee for an application as a mortgage loan originator is three hundred dollars ($300), which shall be paid through NMLS for transmission to the Commissioner, plus twenty dollars ($20) for the processing of a criminal history background check.(e) The Form MU4 application may be considered withdrawn if the Commissioner does not receive the requested information contained in the written notification of a deficiency within 90 days of the notification.(f) In accordance with Section 50002.5 of the Code, a residential mortgage lender, mortgage servicer, or residential mortgage lender and servicer shall not permit a mortgage loan originator whose license or license sponsorship has lapsed, or whose license sponsorship is not in effect, to engage in activities of a mortgage loan originator unless the mortgage loan originator's license has been reinstated pursuant to the procedures set forth in Section 1950.122.5.4 of Subchapter 11.5 of these rules.(g) A residential mortgage lender, mortgage servicer, or residential mortgage lender and servicer shall require every sponsored mortgage loan originator to file an amendment to his or her Form MU4 through NMLS within twenty (20) days of any change to the information contained in the Form MU4.(h) A mortgage loan originator may not engage in business under any name other than a name approved by the Commissioner for use by the sponsor of the mortgage loan originator.(i) A residential mortgage lender, mortgage servicer, or residential mortgage lender and servicer shall be responsible for the acts, practices, and conduct of its sponsored mortgage loan originator in connection with the making, brokering, servicing, or origination of residential mortgage loans until such time that the sponsorship of the mortgage loan originator is terminated through the NMLS. Termination procedures shall be as follows: (1) A residential mortgage lender, mortgage servicer, or residential mortgage lender and servicer shall terminate the sponsorship of a mortgage loan originator through the NMLS within fifteen (15) days after the termination of an individual, and shall clearly state the reason(s) for termination.(2) A mortgage loan originator shall terminate a relationship with a residential mortgage lender, mortgage servicer, or residential mortgage lender and servicer through the NMLS within 15 days of the termination. A mortgage loan originator may not originate loans under the authority of the California Residential Mortgage Lending Act unless he or she has a valid license and the mortgage loan originator has a sponsorship approved by the Commissioner.(j) PROCEDURES FOR A SOLE PROPRIETOR MORTGAGE LOAN ORIGINATOR: A sole proprietor mortgage loan originator must: (1) File Forms MU1 and MU2 (biographical information) and obtain a license as a residential mortgage lender, mortgage servicer, or residential mortgage lender and servicer, and(2) File Form MU4 and obtain a license as a mortgage loan originator.Cal. Code Regs. Tit. 10, § 1950.122.5
1. New section filed 4-1-2010 as an emergency; operative 4-1-2010 (Register 2010, No. 14). A Certificate of Compliance must be transmitted to OAL by 9-28-2010 or emergency language will be repealed by operation of law on the following day.
2. New section refiled 9-28-2010 as an emergency, including amendment of subsection (d); operative 9-28-2010 (Register 2010, No. 40). A Certificate of Compliance must be transmitted to OAL by 12-27-2010 or emergency language will be repealed by operation of law on the following day.
3. New section refiled 12-23-2010 as an emergency, including further amendment of subsection (d); operative 12-23-2010 (Register 2010, No. 52). A Certificate of Compliance must be transmitted to OAL by 3-23-2011 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 12-23-2010 order, including amendment of subsections (d) and (i)(2) and NOTE, transmitted to OAL 3-14-2011 and filed 4-25-2011; amendments operative 5-25-2011 (Register 2011, No. 17). Note: Authority cited: Sections 50002, 50120 and 50304, Financial Code. Reference: Sections 17900, 17910, 17913 and 17926, Business and Professions Code; Section 1798.17, Civil Code; Section 17520, Family Code; Sections 50002, 50002.5, 50120, 50123, 50126, 50140 and 50146, Financial Code; and Section 11077.1, Penal Code.
1. New section filed 4-1-2010 as an emergency; operative 4-1-2010 (Register 2010, No. 14). A Certificate of Compliance must be transmitted to OAL by 9-28-2010 or emergency language will be repealed by operation of law on the following day.
2. New section refiled 9-28-2010 as an emergency, including amendment of subsection (d); operative 9-28-2010 (Register 2010, No. 40). A Certificate of Compliance must be transmitted to OAL by 12-27-2010 or emergency language will be repealed by operation of law on the following day.
3. New section refiled 12-23-2010 as an emergency, including further amendment of subsection (d); operative 12-23-2010 (Register 2010, No. 52). A Certificate of Compliance must be transmitted to OAL by 3-23-2011 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 12-23-2010 order, including amendment of subsections (d) and (i)(2) and Note, transmitted to OAL 3-14-2011 and filed 4-25-2011; amendments operative 5-25-2011 (Register 2011, No. 17).