§ 1422.6. Mortgage Loan Originator Application Procedures.

(a) ESTABLISHING A RELATIONSHIP IN NMLS: A licensed mortgage lender, mortgage broker, or mortgage lender and broker shall sponsor in NMLS each mortgage loan originator employed by it. To sponsor a mortgage loan originator, a mortgage lender, mortgage broker, or mortgage lender and broker 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 1422.6.1 of Subchapter 6 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 mortgage lender, mortgage broker, or mortgage lender and broker. Evidence of compliance with this paragraph shall be maintained as a part of the records of the licensee as required by Sections 1425 and 1426 of Subchapter 6 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 1422.7 of Subchapter 6 of these rules are part of every mortgage loan originator application.

(c) A mortgage lender, mortgage broker, or mortgage lender and broker must establish the sponsorship of the mortgage loan originator in NMLS. 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 mortgage lender, mortgage broker, or mortgage lender and broker has obtained a license through NMLS or has transitioned its license onto NMLS in accordance with Section 1422.5 of Subchapter 6 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 Finance Lenders Law. 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 subdivision (c) of Section 22100, a mortgage lender, mortgage broker, or mortgage lender and broker 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 1422.11 of Subchapter 6 of these rules.

(g) A mortgage lender, mortgage broker, or mortgage lender and broker 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 the use by the sponsor of the mortgage loan originator.

(i) A mortgage lender, mortgage broker, or mortgage lender and broker 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 mortgage lender, mortgage broker, or mortgage lender and broker 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 file an amendment to Form MU4 to terminate a relationship with a mortgage lender, broker, or mortgage lender and broker within 15 days of the termination. A mortgage loan originator may not originate loans 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 mortgage lender, mortgage broker, or mortgage lender and broker, and

(2) File Form MU4 and obtain a license as a mortgage loan originator.

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 (d), 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, including further amendment of subsection (d), 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 subsection (d) and 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: Sections 22105.2 and 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, 22014, 22100, 22105.1, 22107, 22108, 22109.6 and 22347, Financial Code.