Michigan Mortgage Broker License: Full Guide [2020]

Published: Apr 6, 2020
michigan mortgage broker license

 

If you want to start a mortgage business in Michigan, you have to go through a rigorous licensing procedure. You need to obtain a Michigan mortgage broker license, so that you can operate legally in the state. 

The licensing requirements are set by the state Department of Insurance and Financial Services. However, the process for mortgage brokers in Michigan, as in other states, is handled by the Nationwide Multistate Licensing System and Registry (NMLS).

In the guide below, you can find the essential details about obtaining your mortgage license. 

Choose a Mortgage License Type

There are a number of different Michigan mortgage license types that you can choose from: 

  • 1st Mortgage Broker and Lender License – brokering or making 1st mortgage loans for residential property
  • 1st Mortgage Broker License serving as an agent for a person in an attempt to obtain a 1st mortgage loan for residential property
  • 1st Mortgage Broker, Lender, and Servicer Licensebrokering, making or servicing 1st mortgage loans for residential property
  • 2nd Mortgage Broker and Lender License – brokering or making subordinate mortgage loans for residential property
  • 2nd Mortgage Broker License serving as an agent for a person in an attempt to obtain a subordinate mortgage loan for residential property
  • 2nd Mortgage Broker, Lender, and Servicer License brokering, making or servicing subordinate mortgage loans for residential property
  • Mortgage Loan Originator License (individual) – working with loan applications and negotiating loan terms 

You need a registration rather than a license for the respective license type if you are approved as a seller or servicer approved by FHLMC or FNMA, an issuer or servicer approved by GNMA, or are a subsidiary or affiliate of a depository financial institution. 

Most of the license and registration options are for mortgage companies in Michigan, and only the loan originator license is for individuals. 

You can consult the full list of license types on the NMLS website.

Meet the Michigan Mortgage Broker License Requirements

You have to fulfill the state requirements in order to obtain your Michigan mortgage license. 

Business Documents 

You have to get a business registration with the State of Michigan. Afterwards, you need to present your formation documents with your application.

You also have to present the following paperwork:

  • Trade name (if applicable) 
  • Business plan
  • Organizational chart
  • Management chart
  • Resident/Registered Agent information
  • Primary contact employees information
  • Disclosure questions
  • Control Person (MU2) attestation

If you are applying for a Michigan mortgage loan originator license, you only have to fill in the disclosure questions. 

Provide a Surety Bond 

All applicants have to provide a Michigan mortgage broker bond as a part of the licensing process. It ensures your legal compliance, thus safeguarding the interests of your customers.

The bond amounts vary for the different license types:

  • 1st Mortgage Broker and Lender License, 1st Mortgage Broker License, 2nd Mortgage Broker and Lender License and 2nd Mortgage Broker License – $25,000
  • 1st Mortgage Broker, Lender, and Servicer License and 2nd Mortgage Broker, Lender, and Servicer License – $125,000
  • Mortgage Loan Originator License – between $10,000 and $50,000, depending on the yearly volume of closed loans

To get bonded, you have to cover a small fraction of the required bond amount. It depends on the strength of your finances. The main factors that influence your bond cost include your personal credit score, business finances, and fixed and liquid assets. If these indicators are strong, you can expect rates between 0.5% and 5%.

Want to see the exact price of your Michigan mortgage broker bond? Fill in the short form below! 

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Criminal Background Check

Mortgage loan originators (individuals) have to pass an FBI criminal background check

Credit Reports and Financial Statements

You have to authorize a credit report for all control persons and present your financial statements together with your application.  

Education and State Exams 

In case you are an individual mortgage loan originator, you have to complete at least 20 hours of NMLS-approved pre-licensure education courses. You also have to pass the test.  

Complete the Michigan Mortgage Broker License Application

michigan mortgage broker licenseWhenever you have compiled your full set of documents, you have to submit them online through the NMLS website.

The paperwork that has to be filed with the state Department can be mailed to:

Department of Insurance and Financial Services 

Consumer Finance Section 

P.O. Box 30220 Lansing, MI 48909-7720

License and Registration Fees

The licensing and registration fees are the following:

  • 1st and 2nd Mortgage Broker and Lender License – $1,300
  • 1st and 2nd Mortgage Broker and Lender Registration – $850
  • 1st and 2nd Mortgage Broker License – $1,050
  • 1st and 2nd Mortgage Broker Registration – $600
  • 1st and 2nd Mortgage Broker, Lender, and Servicer License – $1,550
  • 1st and 2nd Mortgage Broker, Lender, and Servicer Registration – $1,100
  • Mortgage Loan Originator License – $250 application fee, $30 NMLS initial processing fee

For all license types, the credit report fee is $15 per control person. The FBI criminal background check fee is $36.25.

 

Want to know more about the Michigan mortgage license and bonding process? Don’t hesitate to contact us at tel:877.514.5146.

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John Williams

John Williams

John Williams is currently the Director of Sales for Lance Surety. Since joining the company in 2011, he has served in various roles throughout the organization, working his way up to now managing our team of licensed agents. As a licensed property & casualty agent, John has become extremely knowledgeable in all facets of the surety industry, including commercial, court and contract bonds. Under his leadership, John’s team has helped thousands of businesses throughout the country meet their license and bonding requirements.