| The first thing to keep in mind when deciding to get | | | | criminal history which would exclude them from being |
| licensed in multiple states is that every state is | | | | able to be licensed. Often states handle this by |
| different. Mostly in the last 10 years, every state has | | | | obtaining fingerprints. You will have to go to your local |
| come up with their own licensing scheme. The state | | | | law enforcement office to get the fingerprints. If you |
| congress passes a bill requiring mortgage companies, | | | | do have any criminal or civil background, you will want |
| branches, and/or loan officers to get licensed. The bill | | | | to provide the state with the information up front. Many |
| then designates a regulatory agency such as the | | | | people have minor violations, which could become an |
| Department of Financial Institutions in the state to | | | | issue when licensing if the information is not provided |
| come up with a plan to license all required individuals | | | | up front. The cost for this is around $40 to $75 per |
| according to the bill passed by congress. I'm giving you | | | | person. |
| this background, because it helps to understand the | | | | Education, Experience, and Exams |
| reason why ever state is different. | | | | Each state requires some sort of proof that an officer |
| Although the state congressmen and regulators often | | | | of the company has enough knowledge and |
| help each other come up with these licensing schemes, | | | | experience to adequately run a mortgage company. |
| they almost always add their own little twist to it. In | | | | Normally states will require 1 to 3 years of experience |
| general, however, most states require the mortgage | | | | for a principal officer of the company. Many states |
| company (whether it be a corporation, LLC, or sole | | | | also require initial education and almost every state |
| proprietorship) to be licensed, the branch locations to | | | | requires continuing education in order to renew your |
| be licensed, and the loan originators to be licensed. | | | | license. Initial education can be taken online in some |
| Some exceptions are Colorado for example, which | | | | states but is required to be live in others. There are |
| requires only the loan originators to be licensed and not | | | | about 5 states that require an exam for a principal |
| the company they work for. There is also a common | | | | officer. Even if you have a detailed knowledge of |
| thread to the types of documentation the states | | | | federal laws, you will have to study a lot for these |
| require in an application for a license. I'll be going over | | | | exams since they have a lot of state law questions. |
| this in the rest of the article. | | | | Detailed Ownership, Officer, and Director Information |
| Almost every state has the following requirements: | | | | Every state requires you to provide details on the |
| Filing for certificate of authority as a foreign entity, | | | | owners, officers, and directors of the company. The |
| registered agent, surety bond, fingerprints, education, | | | | information is similar to filling out an application for a |
| experience, and exams, detailed ownership and officer | | | | loan or a new job. They always want your social |
| information, financials, and a final application. | | | | security number, your residence history, employment |
| Certificate of Authority as a Foreign Entity and | | | | history, and criminal history. Again, being as detailed as |
| Registered Agent | | | | possible eliminates the state coming back and asking |
| Usually this is filed with the Secretary of State. It can | | | | for more information |
| range from $25 to as high as $700 but usually costs | | | | Financials |
| about $100. The filing is basic information on the | | | | A majority of states have a net worth requirement. |
| company, its owners, officers, and directors. It is | | | | Net worth is the difference between your assets and |
| required to be filed in almost every state prior to | | | | liabilities. Personal assets are not included in this |
| applying for a license. | | | | calculation unless you put those assets in your |
| A registered agent is someone physical in the state | | | | company. The average net worth requirement for |
| that can receive service of process from a court, | | | | mortgage brokers is about $25,000 but can be as high |
| attorney, or regulatory agency. There are many | | | | as $100,000. Fortunately only a few states require |
| companies that handle this service nationwide for | | | | audited financials in order to obtain a mortgage license. |
| about $125 per state per year. Information on the | | | | Audited financials can be very costly and time |
| registered agent is required to be sent with the filing | | | | consuming. Recent quotes I have seen on audited |
| for the certificate of authority | | | | financials have been between $2,000 to $10,000 per |
| Surety Bond | | | | year. |
| Almost every state is now requiring licensed mortgage | | | | Final Application |
| companies to obtain a surety bond. Basically a surety | | | | The final application is the last step to getting licensed |
| bond protects the consumer, third party, and state | | | | in the state. Every state has different questions they |
| against any claims made against a mortgage | | | | may ask about your business plan, quality control plan, |
| company that does not have the ability to pay. This is | | | | company information, articles of incorporation or |
| not insurance and will be required to be paid back if | | | | organization, etc. The list can go on quite long some |
| you ever get a claim against your surety bond. The | | | | times. The prices for the final license application range |
| best thing to do is to never allow your surety bond to | | | | from as low as $100 to as high as $3,000. Most state |
| be drawn against. Most states require between a | | | | license applications are around $750. |
| $10,000 to $100,000 surety bond to obtain a mortgage | | | | If you are ready to go through this process, we have |
| license. The cost usually ranges from 0.7% to as high | | | | the experience and here at Integrity Mortgage |
| as 3% if you have bad credit or financials. | | | | Licensing to make the process simple and expedited. |
| Fingerprints or other Criminal Background Check | | | | Our costs are $500 in most states and we have large |
| Every state has some way of determining if the | | | | discounts if you plan on getting licenses in 2 or more |
| owners, officers, directors, and loan originators have a | | | | states at a time. |