Mortgage Licensing - An Important First Step to Opening Your Own Mortgage Company
Apply 90 Days Before Opening Your Company
The best course of action is to apply for your mortgage company license at least ninety days before you plan to open your business. Remember that most states will allow you to maintain a mortgage license to operate in the specific state whether you make any loans there or not. The general rule is that you cannot originate any loans in the state until you receive your mortgage license.
Also, on average it takes at least ninety days to receive your license. Therefore it makes great sense to apply early for this license so that you will not need to wait for the license once you have done everything else to be ready to originate your first mortgage loan.
Hiring someone to help - pros and cons:
Pros: Attorneys or licensing firms typically have experience in submitting applications to the various regulators and may be able to help you obtain the license quickly by assisting with the packaging and thorough review of your application.
Cons: The cost to hire someone. The choice is yours. There are of course other costs involved with applying for the mortgage license. For example the cost to apply varies by state and by the types of licenses you are applying for. We recommend that you call around to companies that offer these services and ask how much they charge per each state license. Also, you want to be certain that you ask for their turn around time per state to get the application out to the state and the estimated time for approval of your license.
Where can I go to get help with obtaining my mortgage license?
Some owners of mortgage companies decide to hire someone experienced in mortgage licensing to help them prepare the application and to provide guidance with any follow up information that is requested by the state agency. For example, there are attorneys who specialize in assisting clients with mortgage licensing. From our experience, companies typically charge anywhere from $500.00 to $3,000.00 per state to prepare mortgage licensing applications, with discounts for obtaining multiple states. Prices and fees may vary. Here are a few companies and law firms that offer mortgage licensing services:
Companies and Law firms that Provide Mortgage Licensing Services:
There are quite a few companies that offer to help you with the process of submitting your license application through the actual receipt of your license. We list a few of such companies below.
License to Lend
Thomas Licensing Corporation (law firm providing mortgage licensing services)
Lender License, Inc.
Mortgage Compliance Consulting Group does not endorse any of the above firms, and there are surely several others, but these are some we are familiar with and who provide such services.
Applying for a Mortgage License is a great first step. We wish your success and good luck with your new mortgage company.
How do I find the right application?
Well, lets start with an example. Suppose you want to get licensed as as mortgage broker in California.
In California, there are three separate licenses available:
1) California Broker's License (available from the California Department of Real Estate)
2) California Finance Lender's License (available from the California Department of Corporations)
3) California Residential Mortgage Lender's License (available from the California Department of Corporations)
So which License in California is the Right One for Me?
Our theme here is to provide you with advice to start your own mortgage company at the lowest possible cost.
For that reason, we are likely going to reccommend to you that you obtain the California Finance Lender's License. This license will be the one that is easiest to qualify for of the three licenses. The Department of Real Estate Broker's License is a difficult one to qualify for as it has experience. education requirements, and testing requirements. The California Residential Mortgage Lender's License is also difficult for some persons to qualify for as the license application requires that your company first obtain other federal licenses to be approved and requires that your company have a net worth of at least $250,000.
Here's a summary of the cost and requirements to obtain the "easier" to qualify for California Finance Lender's ("CFL") License:
Important Note: When using this license to broker loans in California you will not be able to broker to banks savings & loans, credit unions. Instead you can only broker loans to other lenders who have also received a California Finance Lender's License. This is an important consideration for you to note before you choose to obatin the CFL license.
Basic Requirements for the California Finance Lender's License:
Where Can I Find More Information Regarding the CFL License and How to Apply?
More information can be found at the California Department of Corporations Website. This website provides all the forms you need to fill out plus helpful guides and instructions for completing the CFL Application. Please click this link for more information:
You have that burning desire to start that new business BUT you just don’t know where to begin. If you have questions about getting started, I have written a step by step guide that shows you how to set up your mortgage company and how to obtain your first mortgage licenses.
To learn more about starting your own mortgage company in the next 90 days, download this:
Sincerely, KJ Block, Mortgage Professional and www.www-becomeamortgagebroker.com
KJ Block is a mortgage professional and attorney at law who has extensive experience in counseling companies in the consumer lending industry regarding compliance with state and federal licensing and consumer protection laws. In recent years, Mr. Block has prepared Training Guides to help lending companies manage the risks involved with traditional, internet, and e-commerce marketing of its financial products.