Mortgage License Requirements

In our business, we get a ton of questions basically asking about the requirements to become a mortgage broker across the country. I thought I would write an entry about some of the general requirements we explain to our potential customers in a FAQ format.

A small disclaimer: Each state has its own specific requirements and qualifications, so please just use this as a guideline. If you would like to discuss specific state requirements, check out our website at www.amlicensing.com or give us a call at 866.588.6600.

Q: What is my first step to get my brokers license?
A: Generally speaking the mortgage broker license in each state is a company license, not a personal license. Therefore, the first step is to setup your company. Most people we work with end up establishing a Corporation or LLC.

Q: How much experience do I need in the industry before getting my own license?
A: This varies from state to state from 0-5 years. Our typical answer is that you should be in the industry as a loan officer or other capacity for at least 1-2 years before you start to pursue licensing on your own.

Q: If I don't have any experience, where can I start?
A: While there are a few states that will permit you to get licensed without any experience, it would seem that a better route is to work for a mortgage broker shop as a loan officer in order to gain experience. Because it is a commission based job, most shops are pretty willing to bring on new loan officers. You may also look into training classes that are available either in a classroom setting or over the internet.

Q: Do I have to have an office in the state in order to be licensed?
A: Each state has its own requirements when it comes to whether or not you must open an office within its borders. When I started in licensing, there were maybe 5-7 states that had this requirement and the number has only gone up. Generally, if the state requires an office, then it will also require you to maintain an employee of your company who works in the office.

Q: Do I really have to have a license in each state where I do business or are their reciprocal licenses available from state to state?
A: As of today, the only states that do not require licensing for mortgage brokers are Alaska and Colorado (CO will begin licensing mortgage brokers on 1/1/07, so that exemption is basically gone), so yes, you must be licensed in each state. Also, the mortgage industry does not seem to have any reciprocal licensing from state to state.

Q: How much is getting licensed going to cost me?
A: Our ballpark estimate is that you should budget somewhere between $2200-$2500 per application where you plan to expand to. This number is just an average, as many states will exceed this and many states will be far less.

Q: How much time will it take:
A: Again, this varies state to state, but you should expect that it will take at least 60-90 days to get your license approval from the state agency.

Hope this is helpful and let me know if there are any general questions I didn't cover.
Eric

Georgia Mortgage License

Well, it has been a bit since I have posted any new information, so I figured we would hit one of the more popular states we do licensing for; Georgia.

The state of Georgia has a single application form (governed by the Georgia Department of Banking and Finance) that can be used to apply for either a brokers license, lenders license, or dual authority. The requirements are higher for lenders, so be sure to pay attention to that should you decide to apply.

One of the first things you will want to do if applying in GA will be to order blank fingerprint cards through the GA website. This is critical as you will want to get your completed fingerprints filed as quickly as possible because the timeframe for those to be investigated can be rather long.

To be licensed as a broker, you have to meet a number of requirements. First, you will have to prove at least 2 years of experience in the mortgage industry through either letters of reference or W2's. You will also have to take a 4 hour GA course which is available at most online providers such as schoolofmortgagelending.com. GA also requires a $50,000 surety bond, but doesn't necessarily have a net worth requirement. However, we have found that your best chance for a speedy approval is to show at least $20-$25k in company net worth.

To be licensed as a lender, the net worth and bond requirements go up substantially. You have the option of either providing audited company financials in the amount of $250,000 or providing a $150,000 surety bond. The experience requirement is still the same as the broker.

One unique requirement that Georgia has involves the need for a physical office. Essentially, GA says that if your home state requires a physical office for out-of-state brokers/lenders then you will have to maintain a physical office in the state of Georgia in order to do business there. Currently, GA recognizes Alabama, Idaho, Kentucky, Missouri, Nevada, New Jersey, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, & Texas as states that require physical offices in their states. If you are located in one of these states, then you will be required to open an office in GA in order to get licensed there.

As always, I hope you have found this information helpful and easy to read. If you have any questions, please post them in the comments section or give us a call at 866.588.6600. Feel free to check out our website at www.amlicensing.com.

Thanks, Eric