§ 1422.5. License Application for Mortgage Lenders, Mortgage Brokers, and Mortgage Lenders and Brokers.  


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  • The procedures set forth in this section are applicable to a mortgage lender, mortgage broker, and mortgage lender and broker that is required to be licensed under Section 22100 of the Code. Except as otherwise provided in Subchapter 6 of these rules, a mortgage lender, mortgage broker, and mortgage lender and broker are subject to the requirements of this section and are not subject to the requirements of Section 1422 of Subchapter 6 of these rules.
    (a) INITIAL APPLICATION: The application for a license as a mortgage lender, broker, or mortgage lender and broker under subdivision (a) of Section 22100 of the Code and any amendment to such application under Section 1409.1 of Subchapter 6 of these rules shall be filed upon Form MU1 (Uniform Mortgage Lender/Mortgage Broker Form) and any exhibits, in accordance with the instructions of NMLS for transmission to the Commissioner. Exhibits that cannot be submitted through NMLS shall be submitted directly to the Commissioner. The notices set forth in Section 1422.7 of Subchapter 6 of these rules are part of every application. An applicant shall provide the following information, exhibits and documentation in the manner provided:
    (1) An applicant shall identify all fictitious business names on Form MU1.
    (A) For each fictitious business name, an applicant shall submit directly to the Commissioner a Fictitious Business Name Statement bearing the seal of the county clerk.
    (B) An applicant may not use a fictitious business name until the Commissioner approves the use of the name. An applicant may not permit a mortgage loan originator sponsored by the applicant or a branch office to use any name not approved by the Commissioner.
    (C) Every applicant and licensee shall comply with the rules governing the filing of a fictitious business name set forth in Business and Professions Code Section 17900 et seq.
    (2) For every additional business location, an applicant shall obtain a branch office license in accordance with Section 1424 of Subchapter 6 of these rules.
    (3) An applicant shall provide the names, personal history, and experience of individual applicants, officers, directors, managing members (in the case of a limited liability company), general and managing partners (in the case of a partnership), and control persons (both direct and indirect) of the applicant through NMLS on Form MU1 within the “Directors and Executive Officers” section and on Form MU2.
    (A) The named individuals shall provide authorization for, and subsequent delivery of, fingerprints to NMLS or the California Department of Justice, or both, as applicable.
    (B) An applicant shall pay all fees required for the criminal history background check.
    (4) An applicant shall submit through NMLS as an exhibit to Form MU1 financial statements prepared in accordance with generally accepted accounting principles and acceptable to the Commissioner, that includes applicant's fiscal year end date.
    (A) The balance sheet shall be dated no more than 90 days before the date that the application is submitted to the Commissioner through NMLS.
    (B) The financial statements shall document the required minimum tangible net worth in accordance with Section 22104 of the Code. An applicant who employs one or more mortgage loan originators must meet and maintain a minimum net worth of $250,000 at all times, and all other applicants shall maintain a minimum net worth of at least $25,000 at all times.
    (5) An applicant shall submit directly to the Commissioner a Customer Authorization of Disclosure of Financial Records form (Exhibit E (Rev. 9/07) to the application for license as a finance lender or broker in Section 1422 of Subchapter 6 of these rules), and maintain a copy in the applicant's books and records as provided in Section 22156 of the Code. This authorization is effective as of the date of execution and shall remain effective until five years after the suspension, surrender, or revocation of the mortgage lender or broker license. The authorization may not be revoked.
    (6) In addition to the identification of business activities requested on Form MU1, an applicant shall submit a detailed description of the applicant's business activities directly to the Commissioner. If an applicant answers yes to either question (7)(A) or (7)(B) of Form MU1, the applicant must also submit an organizational chart.
    (7) An applicant shall submit directly to the Commissioner evidence of surety bond in accordance with Section 1437 of Subchapter 6 of these rules.
    (8) If an applicant intends to engage in any activity not specified in Items 4 and 5 of Form MU1, the applicant shall submit this information directly to the Commissioner.
    (9) A business entity applicant shall submit the following documents directly to the Commissioner:
    (A) A corporate applicant shall submit an original certificate of qualification or good standing from the California Secretary of State executed not more than sixty days before the filing of the application. The certificate must show that the applicant is authorized to transact business in the State of California.
    (B) A foreign corporation shall submit an original certificate of qualification or good standing from the Secretary of State of the state of incorporation executed not more than sixty days before the filing of the application, showing that the applicant is authorized to transact business in that state.
    (C) A partnership applicant shall submit its partnership agreement.
    (D) A limited partnership or limited liability company applicant shall submit an original certificate of qualification or good standing from the California Secretary of State executed not more than sixty days before the filing of the application, showing that the applicant is authorized to transact business in the State of California.
    (E) A foreign limited partnership or limited liability company applicant shall submit an original certificate of qualification or good standing from the Secretary of State of the state of formation executed not more than sixty days before the filing of the application, showing that the applicant is authorized to transact business in that state.
    (10) Every applicant shall provide a registered agent for service of process in item 2(A) of Form MU1 that is located within the state of California.
    (11) An applicant shall provide its website information through NMLS on Form MU1.
    (12) The individual attesting to the filing of the Form MU1 must be a duly authorized individual who has submitted a Form MU2, or who has been delegated to attest to the filing by an individual who has submitted a Form MU2. The attestation provided pursuant to this paragraph shall constitute an agreement to comply with the requirements of the California Finance Lenders Law.
    (b) FILING FEE: Pursuant to Section 22103 of the Financial Code, application fees ($200), investigation fees ($100) and fingerprint processing fees ($20 per set to the Department of Corporations, plus Department of Justice and Federal Bureau of Investigation fees, as applicable) related to the fingerprint and criminal background checks, shall be paid through NMLS for transmission to the Commissioner. The payment of fingerprint processing fees shall be filed directly with the Commissioner until such time as the NMLS can accept the fee. Fees are not refundable.
    (c) COMPLETION OF FILING and ISSUANCE OF LICENSE: An application for licensure as a mortgage lender, mortgage broker, or mortgage lender and broker is not deemed complete until all required fees, all required submissions, and all background and investigative reports are received by the Commissioner. In accordance with Section 22109(b), the Form MU1 application may be considered withdrawn if the Commissioner does not receive the requested information contained in any written notification of a deficiency within 90 days of the notification.
    (d) FILING AN AMENDMENT: In the event of a change to the information in the application, or exhibits thereto, the mortgage lender, mortgage broker, or mortgage lender and broker applicant or licensee shall file an amendment to the Form MU1, MU2, or MU3 through NMLS in accordance with the procedures in Section 1409.1 of Subchapter 6 of these rules. Prior to the issuance of a license, any amendment to an application shall be filed within five (5) days. Any change that cannot be reported through NMLS shall be reported directly to the Commissioner.
HISTORY
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, including amendment of subsection (a)(5) and repealer of subsection (e), refiled 9-28-2010 as an emergency; 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; 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 first paragraph and subsections (a), (a)(3), (a)(4) and (a)(4)(B), new subsection (a)(12) and amendment of Note, transmitted to OAL 3-14-2011 and filed 4-25-2011; amendments operative 5-25-2011 (Register 2011, No. 17).

Note

Note: Authority cited: Section 22150, Financial Code. Reference: Sections 17900, 17910, 17913 and 17926, Business and Professions Code; Section 1798.17, Civil Code; Section 7473, Government Code; Sections 22000, 22100, 22101, 22101.5, 22102, 22103, 22104, 22105, 22105.2, 22106, 22107, 22108, 22109.6, 22112, 22153, 22154, 22156, 22157, 22159 and 22170, Financial Code; Section 17520, Family Code; and Section 11077.1, Penal Code.