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The Basic Guide to Obtaining a Texas Mortgage Broker License

Vic Lance
Aug 05, 2019

Is starting a mortgage brokering business in Texas on your mind?

Is starting a mortgage brokering business in Texas on your mind? Then you have to get acquainted with the administrative process that is needed for all brokers in the state. That’s how you can launch your endeavor in legal compliance.
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.

The essentials about getting licensed

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:

  • Secondary loans (not necessary if you’re already licensed with the Department)
  • 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.

The requirements for your Texas mortgage broker license

In case you have to get licensed with the Department, you have to fulfill the following requirements:

  • Completed company application form MU1 (mortgage company application)
  • Financial statements
  • Formation documents
  • Business plan
  • Organizational and management charts
  • Disclosure questions
  • 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

  • Completed 23 hours of pre-licensure education
  • Passed exam
  • Criminal background check
  • Provide credit report
  • Disclosure questions

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:

  • Completed 20 hours of pre-licensure education
  • Passed exam
  • Criminal background check
  • Company sponsorship form
  • Provide necessary credit reports
  • Disclosure questions

Vic Lance is the founder and president of Lance Surety Bond Associates. He is a surety bond expert who helps mortgage professionals get licensed and bonded. Vic’s phone number is (877) 514-5146 and his e-mail is [email protected].

Aug 05, 2019
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