ORIGINAL SALESPERSON LICENSE

ORIGINAL SALESPERSON LICENSE


This license is required for an individual who is to be employed as a salesperson under the control and supervision of a licensed broker. The license permits licensed activity only while in the employ of a broker. Salesperson licenses must be available for inspection in the broker’s main office (Commissioner’s Regulation 2753). The salesperson can be compensated for work as an agent only by the salesperson’s employing broker. (Sections 10132 and 10137 of the Code)


License Requirements


A candidate for an original real estate salesperson license must: (l) be at least 18 years old; (2) make application on a form prescribed by the Commissioner; (3) be honest and truthful; and (4) pass a qualifying examination as required. The applicant must, prior to the examination, submit proof of completion of a statutory three semester-unit or four quarter-unit college-level course, or an equivalent DRE approved course, in Real Estate Principles, Real Estate Practice, and one additional basic real estate course selected from the following:

• Real Estate Appraisal • Legal Aspects of Real Estate
• Accounting • Real Estate Finance
• Business Law • Real Estate Economics
• Property Management • Escrows
• Mortgage Loan Brokering/Lending • Real Estate Office Administration
• Common Interest Development • Computer Applications in Real Estate
All courses must be three semester-unit or four quarter-unit courses from an institution of higher learning accredited by the Western Association of Schools and Colleges or similar regional accrediting agency recognized by the United States Department of Education, or an equivalent course of study offered by a private vocational school approved by DRE.
The application for a salesperson examination may be filed online at DRE’s web site or may be made on RE 400A and be accompanied by the appropriate examination fee.
There is no limitation on the number of reexaminations which may be taken by the candidate who fails the qualifying examination. Each examination application must include the reexamination fee.
An applicant who fails to take the examination on the scheduled date may apply for another examination date online at DRE’s web site or by completing, signing and submitting the Salesperson Examination Schedule Notice (RE 401A), along with the appropriate fee. The rescheduling request can also be made on a Salesperson Examination Change Application (RE 415A).
An applicant who successfully passes the salesperson examination may apply for a four-year original license by submitting, within one year of the examination date, an application for the real estate salesperson license (RE 202) together with the appropriate license fee and proof of Legal Presence. Applicants must also comply with the fingerprint requirement.


Combined Exam/License Application


Individuals may apply and pay for their real estate salesperson examination and license at the same time by submitting one application and both the license and examination fee. Applicants must complete the Salesperson Exam/License Application (RE 435), which may be obtained from the DRE web site, and submit the required combined license and examination fee, listed on the form. Salesperson examination applicants must submit evidence of completion of a three semester, or quarter unit equivalent, college-level course in Real Estate Principles, Real Estate Practice and one additional course from the previous mentioned course list.


MORTGAGE LOAN ORIGINATOR (MLO) LICENSE ENDORSEMENT REQUIREMENTS


Title V of Public Law 110-289, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), was passed on July 30, 2008. The new federal law gave states one year to pass legislation requiring the licensure of mortgage loan originators according to national standards and the participation of state agencies on the Nationwide Mortgage Licensing System and Registry (NMLS&R). The SAFE Act is designed to enhance consumer protection and reduce fraud through the setting of minimum standards for the licensing and registration of state-licensed mortgage loan originators.
The Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) created, and maintain the NMLS&R. The NMLS&R will contain a single license record for each mortgage loan lender, broker, branch and mortgage loan originator (MLO) that can be used to apply for, amend, and renew a license in any state.
The SAFE Act requires state-licensed Mortgage Loan Originators (MLOs) to pass a written qualified test which covers federal and state law, to complete pre-licensure education courses, and to take annual continuing education courses. The SAFE Act also requires all MLOs to submit fingerprints to the NMLS&R for submission to the FBI for a criminal background check, and authorization for the NMLS&R to obtain an independent credit report.
Senate Bill 36 (SB 36), which was signed into law in October 2009, was enacted in order to bring California into compliance with the SAFE Act. SB 36 requires all DRE real estate licensees who conduct residential MLO activities, as outlined in the SAFE Act, to meet specific requirements to qualify for a MLO real estate license endorsement by January 1, 2011.
Definition of a Residential Mortgage Loan Originator and Residential Mortgage Loan
For individuals licensed by the Department of Real Estate, a mortgage loan originator means:
An individual who takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan for compensation or gain. An individual real estate licensee acting within the meaning of Section 10131 (d) or Section 10131.1(b)(1)(c) of the Business and Professions Code (B&P) is a mortgage loan originator with respect to activities involving residential mortgage loans.


Pre-License Education Requirement


The SAFE Act requires all MLO license applicants to complete 20 hours of pre-license education, including the following specific areas:
a) Three hours of federal law and regulations
b) Three hours of ethics, including fraud, consumer protection, and fair lending issues
c) Two hours of training related to lending standards for the nontraditional mortgage product marketplace
Pre-license education must be completed through a NMLS approved provider. For more information on course providers visit www.dre.ca.gov.



Examination Requirement


State-licensed loan originators pass a qualified written test developed by NMLS and administered by an approved test provider. As required by the SAFE Act, the test is designed to adequately measure an individual's knowledge and comprehension in appropriate areas, to include:
a) Ethics;
b) Federal law and regulation pertaining to mortgage origination;
c) State law and regulation pertaining to mortgage origination;
d) Federal and State law and regulation, including instruction on fraud, consumer protection, the nontraditional mortgage marketplace, and fair lending issues.
The SAFE Test includes two components, a National Component and a Unique California State Component. A MLO license endorsement applicant wishing to satisfy the SAFE test requirements for licensure, must pass each component with a test score of not less than 75 percent correct answers to questions. MLO license applicants wishing to seek licensure in more than one state or jurisdiction, must pass the unique State Component test in each of those states.


Fingerprint/Background Requirement


The SAFE Act requires that each MLO applicant submit a set of fingerprints through the NMLS&R. Although DRE licensees were required to submit fingerprints before their license was issued, a new set of fingerprints must be obtained based on the provisions of the SAFE Act and SB 36.


Financial Responsibility/Credit Report Requirement


The SAFE Act requires that mortgage loan originator applicants have demonstrated financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that applicants will operate honestly, fairly, and effectively.
The SAFE Act also requires that applicants authorize the NMLS&R to obtain a credit report from a consumer reporting agency. This step will be completed as part of the on-line application process. If an individual completes the application process before this functionality becomes available, it will be a required for the first MLO license renewal.
When the credit report is obtained, it will be done through a “soft pull” process which has no effect on the applicants credit score.
DRE has published Regulations in order to define the requirements of the SAFE Act and SB 36. Regulation 2758.3 Evidence of Financial Responsibility, specifically speaks to how DRE will evaluate the financial responsibility requirement for mortgage loan originator applicants.


Renewal and Continuing Education Requirement


Initial MLO license endorsements which are approved for issuance in 2010 will expire on December 31, 2011. Thereafter, MLO endorsements will be issued annually and expire December 31st each year. The renewal requirements for a MLO license endorsement will include a renewal request filed electronically through the NMLS&R, a renewal fee, and filing evidence of completion of 8 hours of continuing education (CE), completed in during 2011. CE must be taken through sponsors approved through the NMLS&R. The continuing education completed for the purpose of renewing a MLO license endorsement cannot be used to satisfy real estate license continuing education requirements. The renewal application filing period will be from November 1 through December 31 each year.


LICENSE RENEWALS - BROKERS AND SALESPERSONS


Licenses are issued for a four year period and should be renewed prior to the expiration date listed on the license. As a reminder, the DRE mails a renewal form to the licensee’s mailing address of record approximately 90 days prior to the license expiration date. The form is sent as a courtesy only. Non-receipt of the renewal form does not relieve the licensee of the responsibility to renew the license. DRE’s eLicensing online system offers expedited processing of salesperson and broker license renewals any time and day of the week. A license is renewable without examination upon submittal of the appropriate fee and evidence of completion of the required continuing education.

If submitted by mail, the application for license renewal must be postmarked prior to midnight of the expiration date of the current license to avoid a lapse in licensure and payment of a late renewal fee. For the purpose of determining the date of mailing, postage meter stamps are not considered evidence of a postmark by the U.S. Postal Service.
If a broker’s license expires, all licensed activities of the broker must cease and the broker’s salespersons are immediately placed in a non-working status. Any branch office licenses are cancelled. The broker must then reactivate the license of each salesperson to the broker’s employ online at the DRE web site or by submitting a Salesperson Change Application (RE 214). The broker must re-activate any branch office licenses by submitting a Branch Office Application (RE 203).
An individual with a conditional salesperson license which has been suspended may renew the license only by submitting evidence of completion of the required college-level semester-unit courses within four years of the date the license was issued. These courses are separate from continuing education courses.


Late Renewal


The holder of a license who fails to renew it prior to the expiration of the period for which it was issued may renew it within two years from such expiration online at the DRE web site or by submitting a proper application, evidence of completion of the current continuing education requirements, and the appropriate late renewal fee. Of course, there can be no licensed activity between the date of license expiration and the date of late renewal. A commission may not be claimed without a valid license.
An individual with a conditional salesperson license which has been suspended and who does not submit evidence of completion of the two required college-level semester-unit courses within four years of the date the license was issued may not renew the license on a late basis. (Section 10154 of the Code)
Two years after a license expires, all license rights lapse. The individual will be required to requalify through the examination process before being licensed in real estate.


OTHER LICENSE INFORMATION
Social Security Number


Effective January 1, 1995, an original or renewal license may not be issued to any individual who has not provided a social security number. This requirement applies to real estate broker and officer licenses, real estate salesperson licenses, pre-paid rental listing licenses, and existing mineral, oil, and gas licenses. The requirement does not apply to corporations with regard to a federal tax identification number.


Child Support Obligors


In accordance with Section 17520 of the Family Code, DRE is precluded from issuing or renewing a full-term license if the applicant is on a list of persons (obligors) who have not complied with a court order to provide child support payments. Additionally, a license may be suspended if a licensee’s name remains on the list 150 days after notice. Information concerning such individuals is provided to DRE by the Department of Child Support Services, which obtains the information from the district attorney of each county in California.
A 150-day temporary license may be issued to an otherwise qualified applicant who is on the list of child support obligors. The applicant will be advised that the license applied for cannot be issued unless a release is obtained from the district attorney’s office during the 150-day temporary license period. If the applicant fails to submit an appropriate release to DRE from the district attorney’s office within the 150-day period, all license rights cease. Only one 150-day temporary license may be issued. License fees submitted are not refundable. In order to be issued another license, all applicable statutory provisions must be met and another licensing fee would have to be submitted. Renewal applicants may have to submit a late renewal fee.
DRE is regularly provided with a supplemental list of obligors which identify individuals who are more than four months delinquent in child support payments and which is matched against DRE’s total license population. If there is a match of an existing licensee and the license is not due for renewal for at least six months, the licensee will be advised that the license will be suspended if the delinquency is not cleared within 150 days. The suspension will remain in effect until the delinquency is cleared.
DRE will assess a $95 fee when the name of a license applicant or licensee appears on a child support obligor list or supplemental list.



Non-Working Status


A salesperson may be issued and hold a license (but not perform acts requiring a license) without being in the employ of a broker. The license will be assigned non-working status until DRE is properly notified that the salesperson is employed by a broker.


Mineral, Oil, and Gas Licenses


Effective January 1, 1994, DRE no longer issues original mineral, oil, and gas (MOG) broker licenses or permits. MOG activities, as defined in Sections 10507 and 10581 of the Code, can be performed by currently licensed MOG brokers, or by licensed real estate brokers. Licensed MOG brokers may apply for license renewal.


Partnerships


DRE does not issue partnership licenses. A partnership may perform acts for which a real estate broker license is required, provided every partner through whom the partnership so acts is a licensed real estate broker.
Broker members of a partnership formed by written agreement may operate from branch offices of the partnership without obtaining an individual branch office license, provided one member of the partnership is licensed at that location. (Commissioner’s Regulation 2728)
A salesperson whose employing broker is a member of a partnership formed by written agreement may perform licensed acts on behalf of the partnership from any branch office maintained by any one of the partners.


Restricted License


There are certain types of restricted licenses sometimes issued by the Commissioner when a license has been suspended, revoked or denied after a hearing. In effect, they are probationary licenses and contain specific restrictions.
The Commissioner can restrict licenses by: term (one month, three months, etc.); employment by a particular broker (for a salesperson); limitation to a certain area or type of activity; requiring detailed reports of each transaction; requiring the filing of a surety bond; other conditions or combinations of conditions.


Fees


License or examination fees must accompany the application for the different types of examination or licenses. Applicants or other interested parties should contact any DRE district office or visit DRE’s web site to obtain information on the current examination or license application fees.
By law, fees paid to DRE in connection with licenses, endorsements, and examinations are not refundable (Section 10207). Therefore, a change of mind on the part of the applicant, rejection of a broker license examination application, examination failure or failure to appear to take an examination will not result in refund of all or any part of the fee paid.
There are no fees to implement the following: address change; salesperson employment transfer; personal or corporate name change; adding or deleting fictitious business name; and branch office.

Because of statutory mandates, license fees are likely to change frequently. Always check DRE’s web site to ensure you are submitting the correct fees.