A mortgage loan originator, defined as any individual who offers or negotiates terms of a residential mortgage loan for the expectation of compensation or gain, must be licensed to operate in California. The California Residential Mortgage Lending Act (CRMLA) and the California Finance Lenders Law (CFLL) impose certain recordkeeping requirements on licensees.
CRMLA licensees must keep the following current:
*General Account Records:
- General ledger reflecting the assets, liabilities, capital, income, and expenses of the business. The bank accounts in the general ledger must be reconciled at least once each month using bank statements of the general accounts.
- Cash receipts and disbursement journal. (10 CCR §1950.314.2).
*Trust Accounts. With regard to trust accounts, licensees are required to maintain the following:
- Trust account ledger card for each account, listing all receipts and disbursement of all funds deposited by the borrower, lender, or seller related to the origination, closing, or servicing of a loan. This record must be reconciled at least weekly using the liability controlling account.
- Cash receipt and disbursement journal. This record must be reconciled at least monthly.
- Copies of all receipts and checks. This record must be reconciled at least monthly.
- Liability controlling account. (10 CCR §1950.314.1(a))
*Loan Log. Licensees must maintain a log which contains the following information for each loan application they receive:
- Name of the borrower;
- Address of property;
- Date of application;
- Loan amount, terms;
- Loan officer;
- Loan program;
- If the loan is closed, disposition of the loan and servicing. (10 CCR §1950.314.4(a))
Stay tuned to the second part of this article for more California Residential Mortgage Lending Act (CRMLA) and the California Finance Lenders Law (CFLL) recordkeeping requirements.
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