If you're a buyer of Rancho Santa Fe homes for sale, it's wise to learn all you can about the home buying process, including the legal aspect of real estate that regulate every buyer, seller, and lender. It's vital to understand these matters to avoid issues that can make the process more difficult than it is.

In addition to the California Finance Lenders Law and the Real Estate Law that license lenders, a regulation was passed as an alternative to these laws: the California Residential Mortgage Lending Act or CRMLA.

This act was submitted in 1994 and began to function in 1996. It was passed to provide a licensing law that is deliberately made to direct the main duties of mortgage bankers; that is to make and service loans. The CRMLA is particularly aimed to control and approve activities regarding mortgage banking, not like the California Finance Lenders Law and the Real Estate Law.

The applicants can get a license under the CRMLA as a servicer, lender, or both. Once they are licensed, they are authorized to perform the following:

• Originate mortgage loans which are federally related

• Originate loans to pay for the construction of a property

• Sell loans to investors

• Service loans

• Buy and sell mortgage loans which are federally related

• Provide institutional lenders contract underwriting services

• Service any loans which are federally related not considering whether the mortgage loan was originated or servicing portfolios are bought

• Give borrowers brokerage services by trying to get a loan from another mortgage lender on their behalf.

Any one in the industry of servicing or originating residential loans in Rancho Santa Fe and in California must have a license, as required by the Act. There are certain entities, however, that are excepted from such requirements, including the ones listed below:

• Trustees in foreclosure procedures;

• Licensed brokers in California;

• Finance lenders in California;

• Pension plans that make residential loans to their members;

• Individuals who act in a fiduciary capacity granted by a court's authority;

• Completely owned service corporations of savings banks or savings and loan associations;

• Municipal, state, and federal governments;

• Credit unions, savings banks, and savings and loan associations that are authorized to do business in California;

• Individuals engaged exclusively in agricultural, commercial, or business mortgage lending;

• Industrial loan companies, insurance companies, trust companies, banks; and

• Federal credit unions, federal savings bank, federally chartered loan and savings associations;

Under the CRMLA, any one of the following can become a licensed mortgage banker:

• A person

• A sole proprietorship

• A corporation

• A partnership

• A limited liability company

• An association

• A trust

• A joint venture

• An unincorporated organization

• A joint stock company

• A government

• A government's political subdivision; or

• Any other entity

The requirements to be able to get a license are listed below:

• Approval as a servicer and/or a lender from any of the following: the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Farmers Home Administration, Government National Mortgage Association, Federal Housing Administration, or Veterans Administration

• Audited financial records that demonstrate actual net worth of no less than $250,000

• $50,000 surety bond

Such information can be helpful for anyone involved in the home buying process, including buyers of Rancho Santa Fe real estate. It's advisable to discuss with your agent anything you don't understand about this complex process.