How to Obtain a Mortgage Loan Originator License Endorsement in California

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parts

1Applying for an Endorsement

2Fulfilling the Necessary Licensing Requirements

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A mortgage loan originator (or MLO) is a real estate professional who processes or helps negotiate the terms of residential mortgage loan applications. In California, you must have a current real estate license on file with the California Bureau of Real Estate (CalBRE) and meet the Bureau’s qualifications for MLO licensing to be granted a license endorsement. Once you’ve completed the necessary requirements, submit a MU4 form electronically through the Nationwide Multistate Licensing System (NMLS) to be issued your endorsement.

Steps

Part 1

Part 1 of 2:

Applying for an Endorsement

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   Apply for or renew your real estate license. All hopeful mortgage loan originators in California must possess a current real estate license. If you’re not already licensed, your first step will be to apply for licensing through the California Bureau of Real Estate (CalBRE). You’ll then be required to sit for a written exam and fill out a formal application in order to be issued a license.

   • First-time applicants will also need to complete 3 college-level courses as part of their pre-licensure education, including Real Estate Principles, Real Estate Practice, and a third course of choice from a list of approved subjects.
   • If you already have a real estate license but it’s not current, you’ll need to renew it before you can submit the form for an MLO license endorsement.
2. 
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   Register for an account in NMLS. The Nationwide Multistate Licensing System, or NMLS, is a standardized recordkeeping system for licensed financial service employees of participating state agencies. When you create an NMLS account, you’ll be assigned a unique ID number. This number will be essential for accessing NMLS documents and fulfilling various requirements throughout the licensing process.

   • Make sure the information you provide is complete and accurate to the best of your knowledge, particularly identifying details like your legal name, date of birth, and Social Security number.
   • You’ll be asked to provide your NMLS ID number whenever you apply for SAFE testing, submit the MU4 form for your MLO license endorsement, or exchange information with federal banking agencies.
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   Take and pass the NMLS SAFE test. The Secure and Fair Enforcement test is designed to demonstrate that you’re familiar with federal regulations and practices designed to safeguard the consumer from fraud. A passing score is required to proceed towards your goal of obtaining your MLO licence endorsement.

   • Unlike most real estate exams, SAFE tests are administered at Prometric testing centers rather than CalBRE exam facilities. You can schedule an exam through the NMLS or by contacting the testing service directly at (877) 671-6657.
   • The National Test with Uniform State Content required for MLOs in California consists of 125 questions and takes approximately 190 minutes to complete. You must make a combined score of at least a 75% in order to pass.
   • It costs $110 to reserve a seat for the SAFE National Test with Uniform Content.
4. 
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   Complete 20 hours of NMLS-approved prelicensure education. The 20 hours is divided up into 3 hours of federal law and regulations, 3 hours of ethics relating to consumer protection, fraud, and fair lending practice, 2 hours of lending standards training, and 12 hours of undefined instruction dealing with mortgage origination. You can enroll in these courses together or separately, but you must take them through an NMLS-approved provider.

   • A complete list of approved education providers is available on the NMLS website.
   • You won’t be issued an endorsement until you’ve successfully completed your NMLS education requirements.
5. 
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   Submit the individual licensee (MU4) form electronically through NMLS. This form declares your intent to apply for a license endorsement as an individual officer or broker. You’ll be asked to provide your personal and real estate license information, request the necessary background check and credit report forms, and sign an attestation stating that you agree to the terms specified by the document.

   • Associated CalBRE and NMLS fees will bring the total cost of processing your MU4 form to $330. You can use a credit or debit card to pay, or enter your bank account information directly through the ACH portal on the NMLS website.
   • Save your progress periodically as you complete the form in case something goes wrong, and be sure to review your information in detail before sending it off.
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Part 2

Part 2 of 2:

Fulfilling the Necessary Licensing Requirements

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   Undergo a background check. Upon completing the MU4 form, you’ll be directed to check a box giving the NMLS permission to obtain a copy of your criminal history through the FBI. Investigators will be looking for any red flags that might make you ineligible to receive an MLO license endorsement in the state of California. All new applicants are expected to submit to screening regardless of their prior standing.

   • The background check is meant to prove that you can be trusted to handle sensitive financial information.
   • Felony convictions involving fraud, financial dishonesty, or breach of trust can immediately disqualify you from licensure.
2. 
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   Submit your fingerprints for NMLS records. In addition to a full background check, you’ll also be expected to send in fingerprint cards for analysis and documentation. Your fingerprints will be used as an additional resource in conducting your criminal screening. To have your prints taken, schedule an appointment with the NMLS’ fingerprinting service, Fieldprint.

   • Be sure to specify the purpose of your submission when filling out the fingerprinting services request.
   • If you already have a copy of your fingerprints on file with the NMLS from previous licensure requirements that are less than 3 years old, it won’t be necessary for you to provide new prints.
3. 
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   Authorize NMLS to obtain a copy of your credit report. You can request a credit report through the NMLS website at the same time that you submit your MU4 form. After filling out the request, you’ll complete the Identity Verification Process (IDV) by answering a series of questions that only you would know. The answers to these questions, along with your real estate license info, will be used to confirm that you are who you claim to be.

   • Employers sometimes elect to pay for an officer or broker’s credit report review. See if the company you work for would be willing to initiate the credit report on your behalf to save yourself the expense.
4. 
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   Request sponsorship from an employing company. The final step in acquiring an endorsement is to form a relationship or sponsorship with a recognized employer. This creates a documented legal connection between a company and an individual MLO. These connections ensure professional accountability and compliance with federal regulation by giving individual MLOs an outside authority to answer to.

   • Relationships attach you to a given company as an employee, while sponsorships allow outside employers to oversee your mortgage origination activities while you operate independently.
   • Without filing a relationship or sponsorship, the status of your endorsement will be listed as “Inactive.”
5. 
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   Complete 8 hours of continuing education each year. MLO license endorsements are renewed on an annual basis. Every year that you renew, you’ll be required to participate in ongoing instruction through one of NMLS’s approved providers. Enroll online on the NMLS website. While you’re there, you can look at a detailed list of continuing education providers, courses, and times to find a program that fits your schedule.

   • Continuing education is simply a way of making sure MLOs stay up-to-date on the laws, regulations, and practices governing the drafting and negotiation of mortgage loan applications.
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Tips

• You're free to complete most of these steps in any order your wish, as long as everything is filed and paid by the date your endorsement is approved.
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• Write down your unique NMLS ID number and account password and add them to your records so you won’t forget them.
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• If you’re planning on running your own MLO business, you’ll have to submit a company MU1 filing in addition to an individual MU4 form. The MU4 must be approved first, after which you’ll be recognized as having sole proprietor status.
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