Re: CA Real Property Loan Law - Posted by Rich-CA
Posted by Rich-CA on July 03, 2007 at 06:56:03:
Your comment was nagging the back of my head last night - my “trick knee” was saying this is in error. So, I googled “CRMLA” this morning. It came up under the Department of Corporations. Here is from the CA Dept of Corp website:
The California Residential Mortgage Lending Act (CRMLA) is contained in Division 20 of the California Financial Code, commencing with Section 50000. The regulations are contained in Subchapter 11.5 of Chapter 3 of Title 10 of the California Code of Regulations, commencing with Section 1950.003 (10 C.C.R. Â§1950.003, et seq.).
The CRMLA was enacted in 1994 and became operative in 1996. The CRMLA was enacted as an alternative to the existing laws licensing lenders under the Real Estate Law and the California Finance Lenders Law, in order to provide mortgage bankers with a licensing law specifically intended to regulate their primary functions of originating loans and servicing loans. Unlike the Real Estate Law and the California Finance Lenders Law, the CRMLA is specifically designed to authorize and regulate mortgage banking activities. An applicant under the CRMLA may obtain a license as a lender, a servicer, or both.
The CRMLA authorizes licensees to make federally related mortgage loans, to make loans to finance the construction of a home, to sell the loans to institutional investors, and to service such loans. Licensees are authorized to purchase and sell federally related mortgage loans and to provide contract underwriting services for institutional lenders. Licensees are authorized to service any federally related mortgage loan regardless of whether they make the loan or purchase a servicing portfolio.
Effective March 20, 1996, a licensed CRMLA lender is authorized to provide brokerage services to a borrower, by attempting to obtain a mortgage loan on behalf of the borrower from another lender.
Then, from the Dept of Real Estate site:
Although the Department of Real Estate has jurisdiction over certain licensees engaged in mortgage loan brokering, we routinely receive calls concerning many areas in which we have no enforcement authority. These include the Real Estate Settlement Procedures Act (RESPA), Truth in Lending Act (TILA & Regulation Z), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), and the Home Mortgage Disclosure Act (HMDA) to name a few. We also receive calls with questions regarding mortgage brokers or lendersâ?? holding a California Finance Lenderâ??s License (CFL) or a Residential Mortgage Lenderâ??s License (RML) which are issued and regulated by the California Department of Corporations. For problems or complaints related to loan servicing, please see our Loan Servicing information under FAQâ??s on our home page.
Botom line: the CA Finance Lender’s License and the Residential Mortgage Lender’s License are NOT under the Dept. of RE jurisdiction. Neither is any lending entity operating under CRMLA.