The Basic Guide to Obtaining a Texas Mortgage Broker License
In order to conduct operations in the state, you have to obtain a Texas mortgage broker license. This guarantees that you meet all of the requirements for this profession. The criteria are set by the licensing authorities in the state, which oversee the activities of mortgage professionals.
The current guide will take you through the most important steps that you need to fulfill so that you start your mortgage business seamlessly.
In Texas, there are two licensing bodies that regulate mortgage brokers. They are the Department of Savings and Mortgage Lending and the Office of the Consumer Credit Commissioner (OCCC).
Typically, residential mortgage loan originators (RMLO) in the state have to obtain a license from the Department. However, if you want to work with certain types of license, you may need a license from the OCCC. These include the origination of:
►Home-equity loans (not necessary if you’re already licensed with the Department)
►Residential property tax loans
►Manufactured housing loans
For both licensing processes, you have to go through the application via the Nationwide Mortgage Licensing System (NMLS), which handles and processes the forms and documents.
In case you have to get licensed with the Department, you have to fulfill the following requirements:
►Organizational and management charts
►Obtain FBI and state criminal history background check for each control person
►Provide credit reports for all control persons
In addition, you also have to complete the mortgage loan originator license (Form MU4) for each employee in your company who will originate loans. The criteria are:
►Criminal background check
►Provide credit report
Applicants with the Department also have to meet the financial requirements set in the Texas Mortgage Broker License Act. You have to either maintain net assets of at least $25,000 or provide a mortgage broker surety bond of $50,000. The bond functions as an additional layer of guarantee for the legal compliance of the licensed broker. In order to get bonded, you have to pay a small fraction of the required bond amount, which is your premium.
In case you want to provide loan servicing to customers, you will also have to obtain a license as a mortgage loan servicer. You need to meet a list of requirements, among which is also providing a surety bond. Its amount is $25,000 if your annual servicing volume is below $25 million, and $50,000 if the volume is above that.
The applicable licensing fees are $150 for a company license, $190 for a mortgage loan originator license, and $350 for mortgage loan servicer license.
As for obtaining a license from the Office of the Consumer Credit Commissioner, the requirements are as follows:
►Criminal background check
►Company sponsorship form
►Provide necessary credit reports