DRE & LicensingIntermediateCalifornia Exam
Which of the following requires a separate endorsement in addition to a California real estate broker license?
ASelling residential homes, consistent with Business and Professions Code licensing rules
BOriginating mortgage loans (MLO endorsement)Correct
CListing commercial properties, under California Department of Real Estate requirements
DManaging residential rentals, per standard DRE licensing procedure
Why Originating mortgage loans (MLO endorsement) Is Correct
Answer B: Originating mortgage loans (MLO endorsement)
In California, a real estate broker who originates residential mortgage loans must obtain a Mortgage Loan Originator (MLO) endorsement from the DRE, in addition to their broker license. This complies with federal SAFE Act requirements.
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Key Terms to Know
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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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.
State-Specific Concepts
Broker SupervisionDRE Regulation
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