A CRMLA licensee servicing 1,800 loans argues that because its license is a state one, its servicing is governed by California law rather than Regulation X. Does holding a California license displace otherwise applicable federal servicing rules?
Correct Answer
A) Wrong: a state license adds requirements and removes no federal ones
State licensing sits on top of the federal servicing rules; nothing in the CRMLA displaces Regulation X, and a licensee answers to both. Other choices: preemption runs the other way where it runs at all; holding the loan in portfolio does not change which servicing rules apply; and federally related mortgage loans are the ordinary case rather than a rarity. Source: Cal. Fin. Code § 50000 et seq.; 12 CFR 1024
Why This Is the Correct Answer
State licensing sits on top of the federal servicing rules; nothing in the CRMLA displaces Regulation X, and a licensee answers to both. Other choices: preemption runs the other way where it runs at all; holding the loan in portfolio does not change which servicing rules apply; and federally related mortgage loans are the ordinary case rather than a rarity. Source: Cal. Fin. Code § 50000 et seq.; 12 CFR 1024
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