California State Prepares to Take SAFE Act Plunge

The California Senate Bill 36 passed both houses of the California legislature in early September and the bill has been enrolled for Governor Arnold Schwarzenegger’s signature. It is expected that Governor Schwarzenegger will sign the bill shortly and, upon doing so, Senate Bill 36 will immediately go into effect. With the passage of the bill, California is one of the last two states during 2009 to adopt legislation implementing the SAFE Act, leaving Minnesota as the only state left to pass the SAFE Act legislation.

Once signed by Governor Schwarzenegger, the bill will have an immediate impact upon California residential mortgage loan originators working for licensed residential mortgage lenders and servicers, finance lenders and brokers and real estate brokers. Similar to other state SAFE Act-related legislation, individuals conducting business as residential mortgage loan originators will be required to complete 20 hours of approved prelicensure education and will be required to pass an examination regarding federal and state laws pertaining to mortgage origination matters. Individuals also will be required to submit to certain background check-related procedures, including providing fingerprint cards and authorizations for third parties to obtain credit reports for review by regulatory agencies. As with similar SAFE Act-related legislation, residential mortgage loan originators under all three California licenses will be required to include their Unique NMLSR Identifier on all advertising-related documentation, including Web sites and business cards.

Although Senate Bill 36 will take immediate effect once signed by Governor Schwarzenegger, individuals acting as residential mortgage loan originators who work for licensed finance lenders and brokers and licensed residential mortgage lenders and servicers will not be required to be individually licensed until July 1, 2010. Individuals operating under the California real estate law will not be required to obtain an approval as a residential mortgage loan originator until December 1, 2010. Only those individuals who intend to act as a residential mortgage loan originator under the California real estate law will be required to obtain an approval as a residential mortgage loan originator (i.e., individuals that will exclusively conduct business as a real estate agent will not be required to obtain an approval as a residential mortgage loan originator under the California real estate law).

For more information on Training contact www.TrainingPro.com