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CA has 3 licenses: Which License is Best For You? Let us Help You.

{1} CA Residential Mortgage Law Act License "RML" or "Mortgage Banker" through the CA Department of Corporations which requires a large governmental approval like Fannie Mae, Freddie Mac or HUD Full Eagle in order to apply

[2] CA Finance Lender License "CFL" through the CA Department of Corporations that allows both brokering [with CFL Lenders only] and lending [but not table-funding]

[3] CA Real Estate Broker License "DRE" or "Mortgage Broker" through the CA Department of Real Estate which is the broadest and most popular CA mortgage broker license but cannot be used from locations outside of CA.

Most brokers cannot qualify for the RML so they choose between the CFL and DRE. There is no perfect license in CA. Each license has its pros and cons. The CFL is the license of choice for most out-of-state brokers because there is no CA physical office requirement, no loan officer requirement and out-of-state branches are permitted. The DRE would require all their loan officers to CA to take college courses and an exam to get their Real Estate Salesman licenses, a CA Physical office requirement and does not permit out-of-state branches. However, the CFL brokering capacity is limited and restricted only to CFL lenders but most CFL brokers develop a new group of wholesale lenders in CA and can shift to being a lender at some time in the future when they obtain a warehouse line of credit.

It depends on how you want to conduct mortgage business in CA as to whether you need just the CFL or whether you need both the DRE and the CFL licenses. If you do not have the HUD Full Eagle you cannot qualify for the RML. CFL license allows both a broker and a lender license [but it does not allow table funding]. The brokering is restricted to using only wholesale lenders who have the CFL license [which precludes many wholesale lenders like banks but there are still plenty of good wholesale lenders that do have the CFL - they just might not be the ones that you are used to working with]. The lending is restricted to selling to only institutional investors and not private investors. Under the CFL, your Loan Officers can be located anywhere in the country and do not need a separate loan officer license if they are your W-2 employee. The DRE [Dept of Real Estate] license must have a CA physical office and all deals must go through the Designated Broker located in CA holding a real estate broker license and all loan officers must have Real Estate Salesman Licenses [which has hard courses and exam] and all loan officers must be located only in CA and operate out of the CA offices. The good part of the DRE license is that you can use all wholesale lenders including banks.

 CA Department of Real Estate  CA Department of Corporations  CA Department of Corporations

CA Dept of Real Estate

320 West 4th Street
Suite 350
Los Angeles CA 90013-1105

Phone Number: (213) 620-2072

Fax Numbers:
Enforcement: (213) 620-6442
Legal: (213) 576-6917
Subdivisions: (213) 576-6942

320 West 4th Street, Suite 750
Los Angeles, CA 90013-1105
(213) 576-7500
320 West 4th Street, Suite 750
Los Angeles, CA 90013-1105
(213) 576-7500
 Real Estate Broker License from Ca. Dept. of Real Estate permits mortgage loans to be brokered to banks, saving loans and credit unions. Key Requirements: CA PHYSICAL OFFICE, CA DESIGNATED BROKER, EACH BROKER AND LOAN OFFICER MUST BE SEPARATELY LICENSED AND TAKE THE NECESSARY COURSES AND EXAM [this is the mainline mortgage broker license for CA but it is a burden on out-of-state companies]

 Consumer Finance Lender License from the CA Deptartment of Corporations Brokers are defined in the California Finance Lenders Law as "any person engaged in the business of negotiating or performing any act as broker in connection with loans made by a Finance Lender". Brokers licensed under this law, may only broker loans to lenders possessing a valid California Finance Lenders license.

Key requirements: $300 filing fee, NO CA PHYSICAL OFFICE REQUIREMENT, NO FINGER PRINT CARDS, NO EXAM, NO SEPARATE LOAN OFFICER LICENSES, CAN APPLY AS BOTH BROKER AND LENDER BUT TABLE FUNDING NOT PERMITTED, broad license covering commercial lending, equipment leasing, secured and unsecured consumer loans, low net worth $25,000, low bond $25000, NO AUDITED FINANCIALS; CAN ONLY BROKER TO CFL LENDERS; SEE SEARCH ENGINE FOR WHO THEY ARE

Financial Code Section 50002(a) states that no person shall engage in the business of making residential mortgage loans or servicing residential mortgage loans in this state without first obtaining a license from the commissioner in accordance with the requirements of the Act and any rules promulgated by the commissioner under this law. Financial Code Section 50003(s) defines "person" to mean a natural person, a sole proprietorship, a corporation, a partnership, a limited liability company, an association, a trust, a joint venture, an unincorporated organization, a joint stock company, a government or a political subdivision of a government, and any other entity. Financial Code Section 50003(f) defines "engage in the business" to mean the dissemination to the public, or any part of the public, by means of written, printed or electronic communication or any communication by means of recorded telephone messages or spoken on radio, television, or similar communication media, of any information relating to the making of residential mortgage loans, the servicing of residential mortgage loans, or both.
 B. CA Real Estate Broker License [CA Department of Real Estate]
1. Mortgage brokering to any licensed or exempt CA Lender permitted
1. CA physical office required with a Designated Broker located at that Address
2. The Designated Broker must sign off on every loan brokered
3. Extensive Courses must be taken by Designated Broker
4. Exam must be passed in CA by Designated Broker
5. Separate real estate salesman licenses for each loan officer requiring extensive courses and passing an exam in CA

 A. CA Finance Lender License [CA Department of Corporations]

1. Mortgage brokering [restricted] and Mortgage Lending [restricted] of CA Residential Consumer Loans permitted
2. No CA physical office required
3. No Exams
4. No Courses to take
5. No separate Loan Officer licenses, courses, exams
6. License permits lending
7. License permits commercial loans, unsecured loans, personal property loans
8. Low Net Worth [$25,000] and low filing fee [$300] and low Bond [$25,000]
9. No Audited Financials Required
1. Table-Funding of CA Residential Consumer Loans not permitted
2. Brokering exclusively to Lenders with CFL license permitted [Note: only a limited number of CA Lenders have this License so client is advised to work up a group of new lenders to work with in CA before applying for this license if Client only brokers loans]
3. As a lender, sale of loans restricted to Institutional Investors

"Engage in the business" also means, without limitation, making residential mortgage loans or servicing residential mortgage loans, or both.Financial Code Section 50003(l) defines a California Residential Mortgage Lender as a lender who is (1) an approved lender for the Federal Housing Administration, Veterans Administration, Farmers Home Administration, Ginnie Mae, Fannie Mae, or Freddie Mac; (2) directly makes residential mortgage loans; and (3) makes the credit decision in the loan transactions. Financial Code Section
50003(n) defines "makes or making residential mortgage loans" or "mortgage lending" to mean the processing, underwriting, or as a lender using or advancing one's own funds, or making a
commitment to advance one's own funds, to a loan applicant for a residential mortgage loan. Financial Code Section 50003(t) defines "residential real property" or "residential real estate" as real property located in this state that is improved by a one-to-four family dwelling. Financial Code Section 50003(p) defines a "mortgage servicer" or "residential mortgage loan
servicer" as a person that (1) is an approved servicer for the Federal Housing Administration, Veterans Administration, Farmers Home Administration, Ginnie Mae, Fannie Mae, or Freddie Mac, and (2) directly services or offers to service mortgage loans.  Financial Code Section 50003(u) defines "Service" or "servicing" to mean receiving more than three
installment payments of principal, interest, or other amounts placed in escrow, pursuant to the terms of a mortgage loan. Financial Code Sections 50201(a)(b) require that all licensees maintain a minimum tangible net worth at all times of two hundred fifty thousand dollars ($250,000). Tangible net worth should be computed in accordance with generally accepted accounting principles. Financial Code Section 50205(a) requires that a licensee maintain a surety bond of $50,000.
 Section 10162 of the Business and Professions Code
Every licensed real estate broker shall have and maintain a
definite place of business in the State of California which shall
serve as his office for the transaction of business. This office
shall be the place where his license is displayed and where
personal consultations with clients are held.
No real estate license authorizes the licensee to do business
except from the location stipulated in the real estate license
issued or as altered pursuant to Section 10161.8.”
 A lender who only has [1] cannot be a wholesale lender to a broker under [2]. Only lenders who have a CFL license can broker to a CFL broker. Attached is a list of some of the bigger lenders who have a CFL license. The best way for you to find lenders in CA with the CFL License is to pull up our website. , click on License Confirmation Page link. Next scroll down to CA and click on the California Finance Lenders and Residential Loan Licensees link to the right. This will bring you to a CA search page. Choose Company Contains , then type in Mortgage or Lender and hit search. This will bring up hundreds of companies with the CFL license. You will need to review the list as some of the companies my only broker, but there are hundreds that are active lenders. That will be your best way of contacting a lender in CA with the CFL license.
We applied for both a broker and lender license under the CFL because you could qualify for it and it gives you a tremendous benefit and costs you no extra. If at some point in the future, you decide that you want to work with some of your present lenders who do not have a CFL license, you can get a warehouse line of credit, close the loans in your name funded with your warehouse line and sell the loan to these lenders. The only restriction on whom you can sell loans to is that they must be an "institutional investor" which I can sure most of the lenders would be.
The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner or for losses or damages incurred by borrowers or consumers as a result of a licensee's noncompliance with
the requirements of the Act. Financial Code Section 50206(a) requires that prior to a change of control of the business of a
licensee, the person wishing to acquire control shall submit a written application to the commissioner and pay an investigation fee of one hundred dollars ($100).  Financial Code Section 50003(e) defines "control" as the possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of a licensee under this division, whether through
voting or through the ownership of voting power of an entity that possesses voting power of the licensee, or otherwise. Control is presumed to exist if a person, directly or indirectly, owns, controls, or holds 10 percent or more of the voting power of a licensee or of an entity that owns, controls, or holds, with power to vote, 10 percent or more of the voting power of a licensee. No person shall be deemed to control a licensee solely by reason of his or her status as an officer or director of the

 Real Estate Corporation License
A corporation may be licensed as a real estate broker through one or more of its officers who are brokers or have qualified for a broker license by examination within the twelve months preceding receipt of application. All acts of the licensed broker/officer(s) under this license must be performed only on behalf of the corporation.

If you are not a resident of California, see Out-of-State Applicants.

For the fee of $165, the license issued to a corporation’s designated officer entitles that individual to conduct licensed activities on behalf of the corporation without payment of an additional license fee. (A fingerprint processing fee may be required of those applicants who have passed the broker examination, but do not currently hold a real estate license (see Fingerprint Requirements). The person applying for a designated broker/officer license must hold an officer title in the corporation. The term "broker/officer" is not an official officer title.

To obtain a corporation license, submit a properly completed Corporation License Application (RE 201), the current license fee, and either a Certificate of Status, Certification of Foreign Corporation, or Certification of Qualification (if issued within 30 days before the date the application is submitted to our office), or the Articles of Incorporation (if filed within six months before the date the application is submitted to our office). Section III of the Corporation License Application (RE 201) requires the designated officer who obtains the original corporation license to file a Corporation Background Statement (RE 212) for any director, chief executive officer, president, first level vice president(s), secretary, chief financial officer, and subordinate officers with responsibility for forming policy of the corporation and all natural persons owning or controlling more than 10% of its shares, if such a person has been the subject of any of the items enumerated in Regulation 2746. If none of the officers have been the subject of any of the items enumerated in that Regulation, a Corporation Background Statement (RE 212) is not needed. In all instances, the designated broker/officer must complete and sign the certification in Part III of the application.

Other officers who are acting for the corporation in any capacity which would require a broker license must be additionally licensed as officers of the corporation. Additional broker/officers may be licensed by submitting a completed Corporation License Application (RE 201) and the current fee. There is no limit to the number of broker/officers who may be added. All brokers who are applying for an additional broker/officer license must hold an officer title in the corporation. The term "broker/officer" is not an official officer title.

The designated corporate officer is responsible for the supervision and control of the activities requiring a license which are conducted, on behalf of the corporation, by its officers and employees. The designated broker officer may, by resolution of the board of directors, assign supervisory responsibility over salespersons licensed to the corporation to additional licensed broker officers. A certified copy of the corporate resolution and Certification (Assignment of Supervisory Responsibility) (RE 210) must be forwarded to DRE within five days after the adoption or modification thereof if such supervisory responsibility has been delegated to other licensed broker officers.

How to Apply

Submit the following:
Completed Corporation License Application (RE 201).

Properly completed Corporation Background Statement(s) (RE 212), if applicable.

Appropriate Fee (see Fees).

A completed Live Scan Service Request (RE 237), when applicable (see Fingerprint Requirements).

Certificate of Status, Certification of Foreign Corporation, or Certification of Qualification (if issued within 30 days before the date the application is submitted to our office), or Articles of Incorporation (if filed with the California Secretary of State within six months before the date the application is submitted to our office). These documents can be obtained by any registered corporation from the California Secretary of State.

Branch Office Application (RE 203), when applicable, for each additional office location being added.

Certified copy of Fictitious Business Name Statement (DBA), when applicable, if the corporation will be doing business with any name other than the corporation name. See Fictitious Business Name Information (RE 282) for further information and specific instructions.

A completed Salesperson Change Application (RE 214) for any salesperson the corporation intends to employ to conduct licensed activity as an employee of the corporation.

Mail to:

Department of Real Estate
Corporations Section
P.O. Box 187004
Sacramento, CA 95818-7004
Proof of Legal Presence

All license applicants must submit proof that they have legal presence in the United States. A proof of legal presence document (i.e., birth certificate, resident alien card, etc.) must be submitted with a State Public Benefits Statement (RE 205) before a license will be issued. For further information, see Proof of Legal Presence.

See also Child Support Obligors.

  Financial Code Section 50306 requires that each licensee notify the Department, in writing, by certified mail, return receipt requested, prior to opening a branch office in California or proposed
change of business location(s) from which activities subject to the Act are conducted. Failure to do so may subject the licensee, by order of the Commissioner, to a penalty of $100 per day for the first 10 days and $10 for each day thereafter during which the branch office or changed location is
maintained without authority.  Each licensee is required to file an annual report for the calendar year just ended containing the
information required by the commissioner each year, whether or not any business has been conducted under the license. The deadline for filing is March 1. Failure to file the report within 10 days from the day designated for the making of the report or any extension will result in a penalty of
$100 per day for every day up to the 10th day. Thereafter any failure to file shall constitute grounds for the suspension or revocation of the license. [Financial Code Sections 50307 and 50326]. Financial Code Section 50200 states that at the end of each licensee's fiscal year, but in no case more than 12 months after the last audit conducted, each residential mortgage licensee is responsible for having its books and accounts audited by an independent certified public accountant. The audit
report is to be filed with the Commissioner within 105 days of the end of the licensee's fiscal year. If a licensee fails to cause an audit to be made, the Commissioner may cause the audit to be made by an independent certified public accountant at the licensee's expense. The Commissioner may summarily revoke the license of a licensee who fails to file an audited financial statement prepared by an independent certified public accountant. All residential mortgage lenders are required to file a report by the 31st of March regarding Holden Act reporting requirements.
Financial Code Section 50401 requires the commissioner by notice to all licensees on or before September 30 of each year to levy an annual assessment to be paid by each licensee of an amount equal to the greater of its pro rata share of all costs and expenses (including overhead, and the
maintenance of a prudent reserve of at least 90 days' costs and expenses) that the Commissioner reasonably expects to incur in the next fiscal year in the administration of the Act and not otherwise
recovered by the Commissioner under this Division from the State Corporations Fund, plus any deficit or less any surplus actually incurred during the previous fiscal year. The minimum assessment amount is $1,000, the maximum is $5,000. Failure to pay the assessment may result in the summary suspension or revocation of the license(s) held by the licensee. Financial Code Section 50302 states that a licensee is subject to the examination of its books and records at anytime, but at least once every 48 months. Affiliates of a licensee are subject to
examination by the Commissioner on the same terms as the licensee, but only when reports from, or examination of, a licensee provides documented evidence of unlawful activity between a licensee and affiliate benefiting, affecting or arising from the activities regulated. The cost of routine
regulatory examinations is paid by the licensee examined. The licensee will pay the reasonable expenses of a nonroutine regulatory examination of the licensee and affiliates. For the purpose of any routine or nonroutine examination, a licensee with a business location outside of California is required to make its books, accounts, papers, records and files available to the
Commissioner in California within 10 days of a request. Alternatively, the licensee may pay the reasonable expenses incurred for travel, meals and lodging of the Commissioner's representative(s)
during any investigation or examination made at the licensee's location outside California. [Financial
Code Section 50120(e)]