How to Obtain a Massachusetts Mortgage Broker License
Are you planning to start a mortgage brokering business in Massachusetts? It’s important to get familiar with the procedure that you have to go through, so you can launch your new endeavor smoothly.
First and foremost, you need to obtain a Massachusetts mortgage broker license from the state Division of Banks. This is how you gain the legal right to operate on the territory of the state. The process entails that you meet a list of licensing criteria that ensure you are a suitable candidate for the job. Among them is posting a mortgage broker bond which guarantees your legal compliance.
In the guide below, you can find out the essentials about getting licensed and bonded as a Massachusetts mortgage broker.
The licensing process for MA mortgage brokers
The Massachusetts Division of Banks oversees the activities of financial professionals in the state. Thus, to get licensed as a mortgage broker, you have to pass its licensing procedure and meet the requirements it has defined for the trade.
The license is necessary if you want to broker more than five loans within 12 months. In case you’re aiming at less than five loans, you don’t need the license, but you have to register as an exempt entity.
The criteria that you have to fulfill for a full license include:
- Submit completed Company Form (MU1)
- Provide an audited or audited-review financial statement prepared by a Certified Public Accountant
- Fill in the information on resident/registered agent and on primary contact employees
- Complete a list of disclosure questions
- For each control person, provide attestation (Form MU2), credit report and FBI criminal background check
- Attach a copy of your Anti-Money Laundering (AML) Policy
- Provide your business plan, formation documents, management chart and organizational chart
- Post a $75,000 surety bond
Together with the required documents, you also have to pay the necessary fees. They are the following:
- $600 license fee
- $300 investigation fee
- $100 initial processing fee
- $15 credit report fee (per control person)
- $36.25 FBI criminal background check (per control person)
Whenever you have compiled the full set of paperwork, you need to submit your application via the Nationwide Multistate Licensing System & Registry (NMLS).
Getting your Massachusetts mortgage broker bond
Most mortgage brokers across the U.S. need to obtain a surety bond to get their state licensing, and this applies to Massachusetts applicants as well. You need to post a $75,000 bond as a part of the procedure with the Division of Banks.
The goal of the bond requirement is to function as a safety net, protecting the state and your customers. It guarantees you will act in accordance with applicable mortgage laws, as well as any other relevant legislation. If you fail to comply, and a party suffers damages, they can file a claim against your bond to get fair compensation.
In order to get bonded, you don’t need to pay the full bond amount. Instead, you have to cover only a fraction of it, which represents the bond premium. For mortgage broker bonds, the rates for applicants with stable finances range between 0.5% and 5%. This means that for a $75,000 bond, your premium can be between $375 and $3,750.
Have further questions about obtaining your Massachusetts mortgage broker license and bonding? You can get in touch with us at 877.514.5146.