How to Obtain a
Mortgage Loan
Originator License
Introduction
The Secure and Fair Enforcement for Mortgage
Licensing Act (SAFE Act) is a federal law that was
enacted in 2008. The SAFE Act requirements
were added to California state law through
Senate Bill 36, signed in 2009. The SAFE Act
enhances consumer protection and reduces fraud
by setting minimum standards for the licensing
and registration of state-licensed mortgage loan
originators (MLOs).
An MLO is defined as an individual who takes a
residential mortgage loan application or offers
or negotiates terms of a residential mortgage
loan for compensation or gain. Note: Individuals
who conduct business as an independent loan
processor or underwriter must hold a real estate
broker license with an MLO endorsement.
An MLO license endorsement may only be issued
to currently licensed individuals or corporations.
To perform residential mortgage loan activities
in California, real estate licensees must submit
and obtain an MLO license endorsement
electronically through the Nationwide Mortgage
Licensing System (NMLS) at http://mortgage.
nationwidelicensingsystem.org/Pages/default.
aspx. Also, the employing party must create a
company relationship and establish sponsorship
with the licensee.
All California Department of Real Estate (DRE)
license requirements remain intact after an MLO
license endorsement is issued. MLO license
endorsements are renewed on an annual basis.
Licensees are required to complete eight hours
of MLO continuing education through an NMLS-
approved course provider in the year the license
endorsement is renewed.
Application and Fee Requirements
MLO license endorsement applications and fees are
filed electronically in NMLS. The type of application(s)
filed and fees submitted depends on the current real
estate license type:
Individual (MU4) Form
• Allsalespersons,brokers,orbroker/ofcers
performing MLO activities must file this form,
includingbrokersorbroker/ofcerswhoonly
supervise other MLO licensees and may not
personally perform MLO activities.
Company (MU1) Form
• AllbrokerswhointendtoconductMLOactivities
on their own must file this form as a sole
proprietor.
• Allcorporationsthatemploylicenseesperforming
MLO activities must file this form as a corporation.
Individual (MU2) Form
• Thisformisledincombinationwithany
Company (MU1) form and sets forth details on
owners, officers, and control persons. There is no
fee required for filing the Individual (MU2) form.
Branch Office (MU3) Form
• Thisformmustbeledbyanybrokeror
corporation to establish a branch office location
where MLO activities are performed.
Consult the DRE website, www.dre.ca.gov, for more
details.
DEPARTMENT OF REAL ESTATE
651 Bannon Street, STE 500
Sacramento, CA 95811
Public Information Line: (877) 373-4542
www.dre.ca.gov
PDE_18-103
Financial Responsibility—Credit Report
Requirement
The SAFE Act requires that each MLO applicant
authorize NMLS to obtain a credit report. This step
will be initiated at the time the MLO license
endorsement application is filed.
Commissioner’s Regulation 2758.3: Evidence of
Financial Responsibility addresses how DRE will
evaluate the financial responsibility requirement for
MLO license endorsement applicants.
Additional Information
• DBAs(tradeorctitiousnames)andbranch
office locations used for mortgage loan origination
activities must be established on DRE records
before adding to their NMLS record.
• Corporationdesignatedbroker/ofcersmust
have an approved Individual (MU4) filing before
the Company (MU1) filing for the corporation will
be approved.
• Brokersworkingasasoleproprietormusthave
an approved Individual (MU4) filing before the
Company (MU1) filing for the sole proprietor will
be approved.
How to Apply for an MLO License
Endorsement
1. Registration: Applicants must request
an account in NMLS (http://mortgage.
nationwidelicensingsystem.org/Pages/default.
aspx) to obtain an NMLS unique ID number.
2. Testing: Applicants must pass the SAFE MLO
test, which is administered at Prometric testing
centers, not DRE examination sites. Exams can
be scheduled through NMLS, Prometric’s website
(www.prometric.com), or by calling Prometric
directly at (877) 671-6657 after the testing fees
have been paid through NMLS.
3. Prelicensure Education: Applicants must complete
20 hours of NMLS-approved prelicensure
education courses in the following areas:
• Threehoursoffederallawandregulations.
• Threehoursofethics,includingfraud,
consumer protection, and fair lending issues.
• Twohoursoftrainingrelatedtolending
standards for the nontraditional mortgage
product marketplace.
• 12hoursofundenedinstructiononmortgage
origination.
The prelicense education does not need to be
completed prior to taking the SAFE MLO test, but
must be completed before an endorsement is
issued.
4. File MU Application(s): Applicants must submit
the appropriate MU application(s) based on their
current California real estate license type.
• Salesperson: Individual (MU4) form
• Individual Broker: Individual (MU4) form
• Corporation and Broker/Officer: Company
(MU1) form and Individual (MU4) form
• Sole Proprietor: Company (MU1) form and
Individual (MU4) form
Applicants must also submit a background
check request and a credit report request when
submitting the Individual (MU4) form.
Resources
DRE website: www.dre.ca.gov/Licensees
DRE Public Information Line: (877) 373-4542
NMLS Call Center: (855) 665-7123
NMLS Resource Center (quick guides,
tutorials, navigation guides, sample
forms, policy guidebook): http://mortgage.
nationwidelicensingsystem.org
Background Requirement
The SAFE Act requires that each MLO applicant
submit a set of fingerprints through NMLS. Fingerprints
submitted to obtain a California real estate license
are not acceptable. A new set of fingerprints must be
submitted to NMLS when applying for an MLO
license endorsement.
Special Information Regarding Prior Violations
The SAFE Act provides for the denial of an MLO under
any of the following conditions:
• Iftheapplicanthaseverbeenconvictedofafelony
involving an act of fraud, dishonesty, breach of trust,
or money laundering, or convicted of any felony in
the seven-year period before filing an application
for an endorsement.
• Ifanapplicanthaseverhadaloanoriginator
license revoked in any governmental jurisdiction.
• Ifanapplicanthasdemonstratedalackofnancial
responsibility, character, and general fitness such as
to command the confidence of the community and
to warrant a determination that the applicant will
operate honestly, fairly, and efficiently.
Contact DRE
To contact the California Department of Real Estate,
call (877) 373-4542 toll-free for assistance in English
or Spanish.
Department of Real Estate District Offices
Sacramento
(Principal office)
651 Bannon Street, STE 500
Sacramento, CA 95811
Fresno
2550 Mariposa Mall, Suite 3070
Fresno, CA 93721-2273
Los Angeles
320 W. 4th Street, Suite 350
Los Angeles, CA 90013-1105
Oakland
1515 Clay Street, Suite 702
Oakland, CA 94612-1462
San Diego
8620 Spectrum Center Blvd.,
Suite 301
San Diego, CA 92123
For more information about MLO license endorsement
requirements, visit DRE’s website at
www.dre.ca.gov/Licensees/MLOLicense.html.