RMLA (Residential Mortgage Lending Act)

Branch Licensing – Letter must be sent to state prior to originating loans. No cost.

Loan Originator Licensing – Initial 6 hour education must be completed by individual Loan Originator prior to brokering loans in California.  Go to: http://www.financialstrategies.com/affiliate/8c812f and order the Online – CA Mandatory Agency & Ethics 6hr Bundle. Continuing education of 6 hours must be completed every 4 years.

DRE (Department of Real Estate)

Branch Licensing – Form must be sent to the state by the DirectLender compliance department prior to originating loans. No Cost

Loan Originator Licensing – Salesperson and Broker licenses may be obtained at http://www.dre.ca.gov. Any individual loan originator that has a DRE salesperson or broker license must hang their license under DirectLender or enter into an exclusive broker to broker agreement in order to originate loans as DirectLender. Continuing Education of 45 hours must be completed every 4 years to renew. Go to: http://www.financialstrategies.com/affiliate/8c812f and order the Online – CA 45hr Bundle. Anyone late in renewing must take a Risk Management Course also. Go to: http://www.financialstrategies.com/affiliate/8c812f and order the Online – California Risk Management 3 hours if you are late in renewing.

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Initial Disclosures –  

Additional Required California Disclosures 

Adjustable Rate Mortgage Loan Program Disclosure

Adjustable Rate Mortgage Loan Program Disclosure London Interbank Offered Rates Index (LIBOR) - Payment Caps

Adjustable Rate Mortgage Loan Program Disclosures Monthly Treasury Average Index - Payment Caps All States Except New York

California Addendum To Loan Application

California Condiminium Earthquake Insurance Disclosure

California Finance Lender ('CFL') Compliance Information

California Hazard Insurance Disclosure

California Real Estate Agency Disclosure

Consumer Caution And Home Ownership Counseling Notice

Covered Loan Disclosure¬ Prepayment Fee And Negative Amortization (CALIFORNIA)

Declaracion De Informacion Sobre Prestamo Hipotecario

Informacion Adicional Exigida Por El Estado De California

informacion adicional exigida por estado de California

Mortgage Broker Fee Disclosure

Mortgage Loan Diclosure Statement

Mortgage Loan Disclosure Statement

Payment Advantage Adjustable Rate Mortgage Disclosure

Statement of Borrower's Benefits

The Housing Financial Discrimination Act of 1977 Fair Lending Notice For Real Estate Broker

Final Disclosures – Coming Soon.

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*Principal dwelling under Fannie Mae Conforming Loan Limit only ($417,000 for 2006) excluding HELOCs
**Bona fide discount points are included
**Does not include YSP as part of Fees Percentage

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PPP period may not exceed 3 years or the ARM introductory fixed-rate period.
PPP calculation may not exceed six months of interest on the pre-paid amount during any 12-month period that is in excess of 20% of the original loan amount.

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Permitted Fees

Brokers may charge: administration fees, application, appraisal, credit report, funding, loan broker, loan discount points, loan origination, mortgage broker fee, points, processing, and yield spread premium.

Only lenders may charge: doc prep & review fees, funding fees, tax service fees, and underwriting fees.

Prohibited Fees

Advance fees, commitment fees, lock-in-fees, referral fees, unearned fees, and warehouse fees.

Late Charge Fees

A late charge may only be assessed if the payment is not made in full after 10 days beyond the installment due date on a 1-4 unit residential property. Loan payments, regardless of positioning, must be applied first to the most recent installment due, and a lender may not impose a late charge more than once for the same installment. A lender may not charge more than 6.00% of the principal and interest portion of the installment due, or $5, whichever is larger.

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Funding Settlement

Dry State

Borrower Signing Requirements

California is a community property state. A spouse may need to execute a quit claim deed, or an inter-spousal deed to release their community property interest, if that spouse is not on the title.

Closing Customs

Closings are generally conducted by an escrow company statewide in California. Conveyance is typically executed by a grant deed, or a quit claim deed, or an inter-spousal deed. The encumbrance is typically a deed of trust. Transactions may be accompanied with a Preliminary Change of Ownership Report.

Real Estate Taxes

Taxes are due November 1st and February 1st. Taxes can be paid annually, or in two installments. The first installment is considered delinquent on December 10th. The second installment is considered delinquent on the following April 10th. For refinances, estimate the current property taxes using the last annual assessed amount. For purchases, calculate 1.1% of the sales price. Note that in Mello-Roos areas or other specified areas, the property tax rate may be as high as 1.75% of the purchase price.

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Advertising Record Retention

Lenders and brokers must maintain a file of all advertisements used for at least ninety days after the date of use.

Advertising Representation

Print and Internet advertisements must display a company name, license number, street address, and telephone number that match the data appearing on the license. All wording must appear in ten points or a larger size. DRE licensees must display one of these two statements: “Licensed Real Estate Broker, California Department of Real Estate, #1308653” or “Licensed by the California Department of Real Estate, Real Estate Broker, #1308653.” RML licensees must display: “Licensed by the California Department of Corporations, RML license #4130767.” RML licensees are prohibited from conducting “blind advertising,” meaning soliciting with “only a telephone number, post office or newspaper box number, or name other than that of the licensee.” Additional criteria exists than what is mentioned here, especially rates of interest, charges, costs of loans, APR, and where a consumer’s loan number or loan amount appears on an advertisement.

Telemarketing

In addition to adhering to the Federal Do Not Call Registry at all times, do not set up or use automatic voice dialers, pre-recorded messages, or automated “blast fax” machines for California solicitations. E-mails and faxes may not be sent to any person or company, for any reason, unless there is prior written consent or AN ESTABLISHED BUSINESS RELATIONSHIP.

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Disclaimer:
This information is tailored for DirectLender. It is deemed reliable but not guaranteed. It is not intended as legal advice, and should not be relied upon as such. The laws, policies, and references cited change periodically.