What is the minimum net worth requirement for a lender seeking a license under the California Residential Mortgage Lending Act (CRMLA)?
Correct Answer
C) $250,000
The CRMLA requires licensed lenders to maintain a minimum net worth of $250,000. This financial threshold ensures that CRMLA lenders have adequate capitalization to operate responsibly in the residential mortgage market.
Why This Is the Correct Answer
The CRMLA requires licensed lenders to maintain a minimum net worth of $250,000. This financial threshold ensures that CRMLA lenders have adequate capitalization to operate responsibly in the residential mortgage market.
Why the Other Options Are Wrong
Option A: $100,000
$100,000 is too low for the CRMLA net worth requirement. This amount does not meet California's standard for residential mortgage lenders.
Option B: $500,000
$500,000 exceeds the CRMLA minimum net worth requirement. While a lender may certainly have this much, it is not the statutory minimum.
Option D: $1,000,000
$1,000,000 is far above the CRMLA net worth minimum. This figure may be confused with net worth requirements in other contexts.
Memory Technique
CA -> ca-crmla-lenders-servicers-bonds-net-worth-servicing
Exam Tip
CRMLA questions usually turn on lender versus servicer authority, branch authority, $250,000 net worth, surety bond coverage, servicing duties, DFPI oversight, and exemptions for regulated depository institutions.
Common Mistakes to Avoid
- -Using a national baseline answer when California has agency-specific DFPI or DRE requirements
- -Confusing CFL, CRMLA, covered-loan, usury, servicing, and DRE endorsement rules
- -Relying on legacy California state-exam or education assumptions instead of current NMLS source pages
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