Mortgage License

The single largest purchase an individual makes in his lifetime is to buy a house and this also leads to his single largest debt. Since land prices touch the sky, financing is absolutely necessary. Mortgage brokers are professionals who, for a fee act as conduits between mortgage companies and individuals who need to borrow. Mortgage brokers are knowledgeable of the laws and regulations pertaining to real estate financing. Licensing of these individuals is essential to protect the consumers as they undertake mortgage that involves payment of considerable sums of money over an extended period of time. Licensed mortgage brokers indicate their expertise and knowledge to guide consumers through the complicated maze of mortgage financing.

The National Association of Mortgage Brokers (NAMB), formed in 1973, provides professional certification to help mortgage brokers obtain a license. Most states are affiliated to NAMB. Every State has its own unique licensing laws and requirements. The common requirements in each state are filing for certificate of authority, registered agent, surety bond, educational qualifications, experience of work, exams, fingerprints, financial statements and information on ownership and incorporation.

Certificate of Authority as a Foreign Entity and Registered Agent:

This certificate is a record of the required information about the company, its owners, officers and directors. In all states this is an essential requirement before applying for a license. This certificate is filed with the Secretary of State and costs about $100. Information about the registered agent should be sent along with the filing for the certificate of authority.

Surety Bond:

Most States require a surety bond to be furnished when applying for a license. The surety bond of value $10,000- $100,000, protects the borrower and the State against any claim filed against the mortgage company.

Background Check and Fingerprinting:

The owners, officers and directors of the Mortgage Company are expected to be above board without any hint of criminal history or violations. Fingerprints are taken from the applicants and sent to the FBI. This process costs about $40-$75 per person.

Education, Experience and Exams:

Educational qualification is a must for an officer of the Mortgage Company to effectively manage the mortgage business. Equally essential is continuing education to renew a license or to acquire additional certification. Most States require the principal officer to have at least 3 years of experience and some states require the officers to appear for an exam.

Detailed Information of Ownership, Officers and Directors:

Each state requires detailed information of the owners, officers and directors such as their Social Security numbers, residence information, education and employment history, credit ratings, and even minor violations of he law. Being truthful about you saves time and eliminates the possibility of the state demanding for more information.

Financial History:

Most states require a total net worth assessment of the person applying for the license. Net worth is the difference between your assets and liabilities. The median net worth requirement to obtain a license is $25,000 but can reach up to $100,000. Few states require audited financial statements from applicants.

Final Application:

This is the final requirement for obtaining a mortgage license. At this stage too, you have to furnish detailed information of your business plans, strategies, quality control and articles of incorporation. The fee for the final license application ranges from $100-$3000.

Let us look up the licensing requirements of some States

Washington DC

The Washington State Department of Financial Institution is responsible for the licensing of the mortgage brokers. The applicant is required to furnish a surety bond ($20,000-$60,000) or as determined by the Director. You can also be approved to submit an irrevocable letter of credit instead of the surety bond. The State institutes a thorough background investigation and fingerprints are taken, which are then sent to the FBI. The application fee is $37.16 for every processing hour. Continuing education is necessary to renew the license. Each applicant must pass a written exam conducted in Olympia WA. Licensees must complete a licensing seminar by the first year of their initial license grant date.

State of Colorado

The Department of Regulatory Agencies, Division of Real Estate, requires all mortgage brokers to be registered with it. All mortgage brokers and loan officers requiring a Colorado registration must submit to a criminal background check with the Colorado Bureau of Investigation. The procedure takes 3 months to complete. All applicants must furnish a $25,000 Surety bond. Mortgage brokers and mortgage-lending companies are not licensed at the company level. The Division of Real Estate fee to register, as a Colorado mortgage broker is $200.

State of Florida

The Florida Department of Banking and Finance, Division of Finance, regulates all mortgage broker activities and licensing in the state. The applicant must be 18 years of age and pass a comprehensive state exam. Prior to the exam, the applicant must attend a 24-hr class at a accredited mortgage broker school. After obtaining a license, the mortgage broker must take additional 14-hrs of continuing education courses during the subsequent two years. Fingerprints and information for a background check are essential.

Florida personal broker license fee is $200, company license fee is $425. 24-hr class fee is $225 and fingerprint card fee is $23

State of Alabama

The Alabama State Banking Department, Bureau of Loans regulates all criteria of Alabama mortgage broker license Act. All applicants for the mortgage broker license must pay an investigation fee of $100 and an initial license fee of $500. Applicants must attend a compulsory 24-hr continuing education class prior to applying for license. No special license is required for second mortgages.

State of New York

The State of New York Banking Department oversees and regulates mortgage brokers working in the state. Applicants pay a $500 application fee and submit a surety bond of $10,000. A fingerprint check and fee of $99 is also required.

Applicants must submit a notarized statement detailing all work experience that qualifies the applicant to be licensed. Original credit reports, professional and personal references complete with addresses and names are to be furnished, all employer and work history and reference from three lenders.

District of Columbia

District of Columbia, Washington DC, the Department of Insurance, Securities and Banking regulates all aspects of licensing laws. Applicants must pay $100 investigation fee, a $500 licensing fee and a $500 non-refundable application fee. A surety bond that does not lapse and in the range of $12,500-$50,000 is to be submitted. Applicants must provide accurate personal and professional information for a background check, financial statements and credit reports. Applicants must furnish certification from a depository institution showing at least $10,000 as deposit or an established line of credit.

State of California

In California there are two separate licenses issued for mortgage brokers, each with its own set of regulations and requirements.

The California Department of Corporation based on the California Finance Lenders Law (CFL) issues its own mortgage broker license.

The California Department of Real Estate (DRE) issues its real Estate Broker License.

When applying for a CFL mortgage broker license in California, applicants must pay a non-refundable investigation fee of $100 and another non-refundable application fee of $200. A continuing surety bond of $25,000 should be submitted. Applicants must furnish proof of citizenship of US or proof of immigrant status. Detailed accurate information of work history, employment records, residence history financial statements complete with names and addresses must be provided. The applicant need not take an exam or any continuing education courses

Licensing by the California Department of Real Estate (DRE)

A real estate broker licensee can also function as a mortgage broker. Applicant must be 18 years of age and a US citizen. Applicant must take a rigorous examination covering all fields of real estate and its financing. Prior to the exam, two college level statutory courses, which are not continuing education courses, must be completed. The exam fee is $50. 45-hrs of continuing education courses are required after obtaining a license. Applicants pay a $165 license fee, 65 fingerprinting fee and must have a physical office in California.