Questions and Answers
Which type of loan would a licensee operating under a consumer finance lender’s license NOT make?
Which action is NOT permitted for a CFL licensee?
What is the minimum net worth requirement for an applicant for a CFL license?
Who is eligible for licensing under the California Residential Mortgage Lending Act?
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The residential mortgage loan license applies ONLY to which type of property?
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Which option is exempt from licensing under the California Residential Mortgage Lending Act?
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What can a person licensed with a CRMLA license do?
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What is the minimum net worth requirement for applicants under the California Residential Mortgage Lending Act?
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What is the required surety bond amount for applicants for the Residential Mortgage Lending license?
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A licensee operating under a consumer finance lender’s license can make a loan of which amount secured by personal property?
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Study Notes
Consumer Finance Lender (CFL) License Requirements
- CFL licensees cannot make loans secured by real property over $10,000.
- CFL licensees can secure loans with personal property or combinations of real and personal property.
CFL Licensee Actions
- CFL licensees cannot be beneficiaries on promissory notes.
- They may fund loans using advances from institutional lenders.
- Lending criteria established by institutional lenders can be utilized.
- Borrowing against a line of credit for loans is prohibited.
Net Worth Requirements for CFL License
- Applicants must demonstrate a minimum net worth of $100,000 to qualify for a CFL license.
Licensing Under California Residential Mortgage Lending Act (CRMLA)
- Eligible entities for CRMLA licensing include individuals, partnerships, and corporations.
- The residential mortgage loan license specifically pertains to one-to-four residential units in California.
Exemptions from CRMLA Licensing
- Banks, savings and loans, and private investors using their own funds are exempt from the licensing requirements.
Rights and Responsibilities of CRMLA License Holders
- Licensees are authorized to make residential loans, buy/sell residential mortgage loans from institutional lenders, and provide brokerage services for borrowers.
- A surety bond of at least $50,000 must be maintained by applicants for the Residential Mortgage Lending license.
Restrictions for CRMLA License Holders
- CRMLA licensees are prohibited from utilizing independent contractors for lending services.
- They are restricted from making any residential loans above $5,000 or having branch offices.
Consumer Finance Lender (CFL) License Requirements
- CFL licensees cannot make loans secured by real property over $10,000.
- CFL licensees can secure loans with personal property or combinations of real and personal property.
CFL Licensee Actions
- CFL licensees cannot be beneficiaries on promissory notes.
- They may fund loans using advances from institutional lenders.
- Lending criteria established by institutional lenders can be utilized.
- Borrowing against a line of credit for loans is prohibited.
Net Worth Requirements for CFL License
- Applicants must demonstrate a minimum net worth of $100,000 to qualify for a CFL license.
Licensing Under California Residential Mortgage Lending Act (CRMLA)
- Eligible entities for CRMLA licensing include individuals, partnerships, and corporations.
- The residential mortgage loan license specifically pertains to one-to-four residential units in California.
Exemptions from CRMLA Licensing
- Banks, savings and loans, and private investors using their own funds are exempt from the licensing requirements.
Rights and Responsibilities of CRMLA License Holders
- Licensees are authorized to make residential loans, buy/sell residential mortgage loans from institutional lenders, and provide brokerage services for borrowers.
- A surety bond of at least $50,000 must be maintained by applicants for the Residential Mortgage Lending license.
Restrictions for CRMLA License Holders
- CRMLA licensees are prohibited from utilizing independent contractors for lending services.
- They are restricted from making any residential loans above $5,000 or having branch offices.
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Description
Test your knowledge with this quiz on corporate finance, specifically focused on the roles and regulations surrounding consumer finance lenders. Answer questions about loan types and licensee responsibilities to assess your understanding of chapter 3 in the corporate finance curriculum.
