DRE & LicensingIntermediateCalifornia Exam
What is the purpose of the California Mortgage Loan Originator (MLO) license endorsement?
ATo allow brokers to sell title insurance, as required for license renewal in California
BTo allow real estate licensees to take residential mortgage loan applications and offer or negotiate loan termsCorrect
CTo authorize appraisers to perform mortgage appraisals, consistent with Business and Professions Code licensing rules
DTo allow brokers to manage real estate investment trusts, under California Department of Real Estate requirements
Why To allow real estate licensees to take residential mortgage loan applications and offer or negotiate loan terms Is Correct
Answer B: To allow real estate licensees to take residential mortgage loan applications and offer or negotiate loan terms
The Mortgage Loan Originator (MLO) license endorsement, required under the SAFE Act and administered by the DRE, allows licensed real estate brokers and salespersons to originate residential mortgage loans — taking loan applications and offering or negotiating the terms of loans for compensation. This endorsement requires additional testing and continuing education.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
State-Specific Concepts
Continuing EducationDRE Regulation
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