Step-By-Step Guide To Becoming A Licensed Loan Officer In California

California is a land of infinite opportunities and an immense potential for success and prosperity for individuals and businesses. 

The Golden Gate State is home to thousands of real estate agents, mortgage brokers, loan officers, and realtors who are enjoying a rewarding and satisfying career. 

California’s historical real estate landscape is renowned for its strong demand and a steady influx of skilled workers, homebuyers, and real estate inventors. 

Currently placed amongst the top hottest real estate markets in the country, California continues to record steady growth in the number of houses sold, available inventory levels, and the median selling price for residential and commercial properties. 

The sustained demand for housing and residential real estate in CA has contributed to the rapid growth in the number of job openings for mortgage loan officers and brokers. 

Mortgage loan officers (MLOs) play a crucial role in the mortgage lending and housing industry as they are responsible for helping homeowners and borrowers secure financing for their real estate purchases. 

Did you know that experienced mortgage loan officers in CA can earn as much as $200K annually along with additional job perks and commission opportunities? 

The top earners can rake in as much as $170K every year in earnings all while enjoying a flexible work-life balance in a growing industry. 

Even the average salary of a licensed loan officer is around $90K annually making it a rewarding career path for many. 

Wondering what it takes to become a part of this industry? All you need is a MLO license issued by the state of California and you too can work with clients and perform the duties of a residential loan officer. 

If you are eager to learn more about how to start a career as a mortgage loan officer in CA and become a part of a dynamic, flexible, and stable industry, this article is for you. 

In this step-by-step guide, we have covered all the requirements of what it takes to get your mortgage loan officer license in California and how you can prepare yourself for the licensing journey. 

The need for mortgage loans

In real estate, a mortgage is an important part and step of completing the home-buying process. 

Since the dawn of credit, lending and borrowing have been the two major pillars of the financial industry. 

Since the day people have been selling and buying real estate, financial institutions, and credit companies have been lending money to borrowers. 

After all, paying for a home or commercial real estate out of their own pockets is possible only for a handful of buyers.

To put it simply, without getting a mortgage, it would be nearly impossible for most buyers to finance their home purchase in a state like California. 

Many people think of a mortgage as a financial loan, but it is more than just money, it is a medium through which borrowers and buyers can achieve their home ownership dreams.

If you are someone who wants to become a part of California’s real estate boom, without signing up for a traditional career path, then you can opt for a mortgage loan officer job. 

If you are good with mathematics and analysis and like helping people, then a career in mortgage lending might just be the right fit for you. 

Working as a mortgage loan officer in California is a rewarding and enriching career path, especially for those who do not wish to be a real estate agent and broker. 

Before we give you a deep dive into the specifics of CA MLO license requirements let us explain the key job duties and responsibilities of a loan officer. 

What does a mortgage loan officer do?

Mortgage loan officers (sometimes also referred to as mortgage loan originators) are professionals who work on behalf of financial institutions, lending companies, and credit unions to assist borrowers in getting a mortgage.

As a loan officer, your primary job responsibility is to assist borrowers and individuals in securing financing for buying a new home or refinancing an existing one. 

MLOs work directly with consumers who are looking for mortgage loans and based on their needs, requirements, and eligibility, loan officers assist consumers in financing their real estate purchase. 

Loan officers in California are expected to perform the same or similar set of duties and tasks as part of their job. Some of the key ones are listed below. 

• Meeting with potential clients and discussing their mortgage requirements and needs. 
• Evaluating the creditworthiness of borrowers based on their financial history, income stubs, bank statements, credit reports, tax returns, and other assets. 
• Conducting interviews with clients to analyze their financial health and capabilities. 
• Reviewing financial and personal documents of clients to verify the accuracy of the information and avoid any potential risks. 
• Educating clients about the different mortgage plans, payment terms, and interest rates to meet their needs and goals. 
• Recommending the most suitable and personalized mortgage plan and solution to suit the needs of borrowers based on their financial capabilities. 
• Explaining to clients about the terms and conditions, loan terms, payment milestones, interest rates, rescheduling terms, and any other important details. 
• Assisting clients in completing the loan application process and helping them in filling the required information and documentation. 
• Submitting the loan application to underwriters and working with lenders to address any questions or resolve any issues.
• Communicate with clients regarding important updates and all the necessary information whenever needed.
• Stay updated with the latest industry trends, regulations, and developments and all the important happenings in the mortgage lending market. 

As you would have figured out, loan officers liaison between lenders and borrowers, keeping both parties in the loop throughout different stages of the loan process. 

If you are an aspiring mortgage loan officer, you must prepare to juggle multiple tasks and ensure that you are good at organizing, processing, and analyzing financial information while being a clear communicator with good interpersonal skills.

Understanding the MLO licensing requirements in California

In California, you must complete and fulfill the state licensing requirements to become eligible for applying for a mortgage loan originator license. 

It is not only mandatory to meet the licensing requirements, but it is also a best practice to build a thriving, successful career in a competitive industry. 

With a license, you will demonstrate your capabilities to work in a highly regulated industry with confidence.  

Having a state-approved license will give you the authorization to work with clients and assist them in making financial decisions based on your advice and skills. 

Let’s take a look at the essential California MLO license requirements that you must fulfill. 

First and foremost is completing the necessary education and training to qualify for a MLO license. 

Since you will be responsible for financial decision-making and number crunching, you must acquire the knowledge and skills needed for the job. 

To apply for a CA MLO license, you must have at least a high school diploma or GED equivalent in education. 

Additionally, you should have a bachelor’s degree in finance, accounting, or business administration to be eligible.

If you meet the above eligibility requirements, the next step is to complete 20 hours of pre-licensing education approved by the NMLS. 

The NMLS (Nationwide Multistate Licensing System) is the regulatory authority that oversees the issuing and renewing of licenses to individuals and firms working in the mortgage lending industry in the states. 

Like most states, California also follows the NMLS guidelines for issuing licenses to applicants who want to become a mortgage loan officer or brokers. 

The pre-licensing education will consist of mandatory courses based on the fundamentals of the industry along with state and federal laws, regulations, and guidelines for professionals. 

Some of the courses you will cover are: 

• Federal law and regulations (3 hours)
• Ethical practice (3 hours)
• Non-traditional mortgage lending standards (2 hours)
• Mortgage origination (20 hours) 

In addition to the above-listed mandatory courses, your state might require you to complete additional topics as part of your education. 

Students are free to choose whether they want to join in-person, classroom-based learning to complete their education or enroll in a virtual, online pre-licensing course. 

However, it is recommended that you choose an NMLS-approved education provider to ensure you are learning from certified and trusted instructors and curriculum. 

Generally, students prefer online courses as they offer more flexibility in terms of learning at your own pace and from your desired location. 

Passing the SAFE MLO test in California

After you have successfully completed your pre-licensing education and obtained a certificate of completion, you can proceed to take the MLO licensing exam. 

As per the California mortgage loan originator license requirements, all applicants must take and pass the SAFE test to earn their license by scoring at least 75 percent or above. 

Passing the state and national component of the NMLS SAFE exam is mandatory and you must approach the test with preparation. 

Many education providers offer specialized training and exam prep resources for students who want to ace the test with confidence. 

It is recommended that you practice using sample test questions and mock tests to understand the structure of the exam and familiarize yourself with the type of questions. 

Students can also take advantage of flashcards, video lessons, and PDFs to keep track of the most important components and sections of the test. 

Clearing the background verification check 

So you have completed the required education and successfully passed the licensing test and now you are just a few steps away from starting your career in California’s mortgage lending industry. 

The NMLS requires all applicants to clear the background verification and FBI criminal history check in order to ensure that individuals meet the minimum standards of good character, general fitness, and demonstrate financial responsibility. 

To complete this check, you must provide an electronic scan of your fingerprints to the California Department of Justice along with a credit report. 

If you have any history of felony or any unlawful activity, you need to submit a certificate of clearance from the local sheriff’s office. 

Once you have all the required documents, you can submit them through the NMLS online portal along with your licensing application for review. 

It generally takes between a week or two to get the verification process completed and if your application is reviewed, you will receive your MLO license. 

Finding employer sponsorship

The licensing process requires all applicants to find a sponsoring employer in the state of California with whom they can gain industry experience and real-world skills.

Once you find a supervising MLO or financial institution, you can submit the sponsorship details on the NMLS website for approval.