CALIFORNIA LAWS AND REGULATIONS FINAL PAPER 2025
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔Conducting Business with Unlicensed Mortgage Originators including: - ✔✔•
Employing or compensating a Mortgage Loan Originator who is not licensed
• Employing a Mortgage Loan Originator whose license has lapsed
• Making or brokering a Residential Mortgage Loan that is offered, negotiated, or
applied for through an unlicensed mortgage loan originator
✔✔Using an Unlicensed Name: - ✔✔Conducting the business of a Residential
Mortgage Lender or Servicer under a name other than the name that appears on the
license
✔✔Improperly Disbursing Funds: - ✔✔• Disbursing mortgage loan proceeds into the
borrower's account in a form other than direct deposit, wire, certified check, ACH funds
transfer, or attorney's check from a trust account without applying to the Commissioner
for a waiver of these procedures & a request to use another method of disbursement
• Failure to disburse funds in accordance w/ an agreement
✔✔Making Loans Beyond the Parameters of the License: - ✔✔• Making or serving a
loan that is not a Residential Mortgage Loan
• Selling more than 8 loans per year under the authority of a lender of a mortgage
servicer license to a person who is not an institutional lender
✔✔Using Predatory Practices including: - ✔✔• Accepting fees at closing that are not
listed on the HUD-1 Settlement Statement
• Providing the borrower with a lending agreement or other documents with blanks to be
completed after the closing
• Delaying a closing in order to increase the interest rate, costs, or other fees
• Using fraudulent underwriting practices
• Influencing the independent judgment of an appraiser
• Misrepresenting or concealing any information regarding a transaction
• Committing any fraudulent or dishonest acts
✔✔Violating the California Civil Code
Specific violations to avoid are: - ✔✔• Violating CA laws that determine when interest
begins to accrue
• Negotiating or consummating a transaction that takes unconscionable advantage of a
property owner in foreclosure
• Use of unfair business practices, including the use of deceptive, untrue, or misleading
advertising
• Failing, within 30 days after a mortgage is satisfied, to execute a certificate of
discharge
✔✔Violating the California Business & Professions Code
, Specific violations to avoid are: - ✔✔• Use of unfair business practices, including
deceptive, untrue, or misleading advertising
• Making, disseminating, or advertising any statement regarding real or personal
property or professional services that is untrue & that is made as part of a scheme to
not sell the property or services at the price stated
✔✔Penalties - ✔✔CRMLA authorizes the Commissioner to impose penalties on
Lenders, Servicers, & on Mortgage Loan Originators after the licensee has an
opportunity for a hearing to address alleged violations of the law, regulations, and/or
orders of Commissioner
✔✔The maximum penalty for a violation is... - ✔✔$25,000. Each failure to comply w/ the
law, regulation, or order is a separate violation & is subject to a separate penalty.
✔✔California Fair Lending Law, CFL regulation - ✔✔California Health and Safety Code
§§35800 through 35833 are known as CFL regulation.
or Equal Credit Opportunity (Regulation B)
or Ca Holden Act- Fair Lending Notice
The Fair Lending is a California State disclosure that informs the loan applicant that it is
illegal to discriminate against credit applicants on the basis of race, color, religion, sex,
marital status, national origin or ancestry, and conditions, characteristics, or trends in
the neighborhood or geographic area surrounding a housing accommodation.
The purpose of Fair Lending Notice is to comply with the provisions of the California
Housing Financial Discrimination Act of 1977, which is also known as the Holden Act.
✔✔California Finance Lenders Law - ✔✔all of the following for business licensees
-branch offices must be located in a suitable location determined by the Commissioner.
-required documents must be filed when there is a change of address.
-each office must be certified for coverage by a surety bond.
-Registered residential mortgage brokers do not have to maintain an office in the state
provided they are qualified to do business here and have a registered agent for service
of process.
✔✔State Regulatory Registry LLC (SRR) - ✔✔It was established on September 21,
2006 by American Association of Residential Mortgage Regulators and The Conference
of State Bank Supervisors (CSBS).
✔✔mortgage broker license - ✔✔surety bond of $25,000, and tangible net worth of at
least $250k
can only charge for appraisal
✔✔MLO - ✔✔pardoned conviction
sponsored/employed by a mortgage lender
A person hired by a licensed lender to work as a mortgage servicer has to have
Licensed.
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔Conducting Business with Unlicensed Mortgage Originators including: - ✔✔•
Employing or compensating a Mortgage Loan Originator who is not licensed
• Employing a Mortgage Loan Originator whose license has lapsed
• Making or brokering a Residential Mortgage Loan that is offered, negotiated, or
applied for through an unlicensed mortgage loan originator
✔✔Using an Unlicensed Name: - ✔✔Conducting the business of a Residential
Mortgage Lender or Servicer under a name other than the name that appears on the
license
✔✔Improperly Disbursing Funds: - ✔✔• Disbursing mortgage loan proceeds into the
borrower's account in a form other than direct deposit, wire, certified check, ACH funds
transfer, or attorney's check from a trust account without applying to the Commissioner
for a waiver of these procedures & a request to use another method of disbursement
• Failure to disburse funds in accordance w/ an agreement
✔✔Making Loans Beyond the Parameters of the License: - ✔✔• Making or serving a
loan that is not a Residential Mortgage Loan
• Selling more than 8 loans per year under the authority of a lender of a mortgage
servicer license to a person who is not an institutional lender
✔✔Using Predatory Practices including: - ✔✔• Accepting fees at closing that are not
listed on the HUD-1 Settlement Statement
• Providing the borrower with a lending agreement or other documents with blanks to be
completed after the closing
• Delaying a closing in order to increase the interest rate, costs, or other fees
• Using fraudulent underwriting practices
• Influencing the independent judgment of an appraiser
• Misrepresenting or concealing any information regarding a transaction
• Committing any fraudulent or dishonest acts
✔✔Violating the California Civil Code
Specific violations to avoid are: - ✔✔• Violating CA laws that determine when interest
begins to accrue
• Negotiating or consummating a transaction that takes unconscionable advantage of a
property owner in foreclosure
• Use of unfair business practices, including the use of deceptive, untrue, or misleading
advertising
• Failing, within 30 days after a mortgage is satisfied, to execute a certificate of
discharge
✔✔Violating the California Business & Professions Code
, Specific violations to avoid are: - ✔✔• Use of unfair business practices, including
deceptive, untrue, or misleading advertising
• Making, disseminating, or advertising any statement regarding real or personal
property or professional services that is untrue & that is made as part of a scheme to
not sell the property or services at the price stated
✔✔Penalties - ✔✔CRMLA authorizes the Commissioner to impose penalties on
Lenders, Servicers, & on Mortgage Loan Originators after the licensee has an
opportunity for a hearing to address alleged violations of the law, regulations, and/or
orders of Commissioner
✔✔The maximum penalty for a violation is... - ✔✔$25,000. Each failure to comply w/ the
law, regulation, or order is a separate violation & is subject to a separate penalty.
✔✔California Fair Lending Law, CFL regulation - ✔✔California Health and Safety Code
§§35800 through 35833 are known as CFL regulation.
or Equal Credit Opportunity (Regulation B)
or Ca Holden Act- Fair Lending Notice
The Fair Lending is a California State disclosure that informs the loan applicant that it is
illegal to discriminate against credit applicants on the basis of race, color, religion, sex,
marital status, national origin or ancestry, and conditions, characteristics, or trends in
the neighborhood or geographic area surrounding a housing accommodation.
The purpose of Fair Lending Notice is to comply with the provisions of the California
Housing Financial Discrimination Act of 1977, which is also known as the Holden Act.
✔✔California Finance Lenders Law - ✔✔all of the following for business licensees
-branch offices must be located in a suitable location determined by the Commissioner.
-required documents must be filed when there is a change of address.
-each office must be certified for coverage by a surety bond.
-Registered residential mortgage brokers do not have to maintain an office in the state
provided they are qualified to do business here and have a registered agent for service
of process.
✔✔State Regulatory Registry LLC (SRR) - ✔✔It was established on September 21,
2006 by American Association of Residential Mortgage Regulators and The Conference
of State Bank Supervisors (CSBS).
✔✔mortgage broker license - ✔✔surety bond of $25,000, and tangible net worth of at
least $250k
can only charge for appraisal
✔✔MLO - ✔✔pardoned conviction
sponsored/employed by a mortgage lender
A person hired by a licensed lender to work as a mortgage servicer has to have
Licensed.
