A Simple Guide for Getting a Mortgage Broker License in New York

Published: May 15, 2019
new york mortgage broker license

 

Mortgage brokers in the state of New York, as in most other states across the country, have to undergo a licensing procedure prior to starting their business.

In order to obtain your New York mortgage broker license, you have to meet a strict set of criteria set by state authorities. This is how the state aims to ensure you are a suitable professional who can conduct soliciting, processing, placing or negotiating of mortgage loans for customers.

One of the main requirements that you have to fulfill in this process is to provide a mortgage broker bond. It serves as a safety mechanism that guarantees your legal compliance, and thus protects the state, and the general public.   

You can find out the details about the licensing procedure and requirements in the current guide, so that you can launch your mortgage broker business with ease.

The requirements for your New York mortgage broker license

The New York State Department of Financial Services is the authority that oversees the activities of mortgage brokers and other financial professionals in the state. It sets the licensing criteria that you have to satisfy to be granted a license. The mortgage broker license allows you to engage in loan brokering, third-party loan processing, and lead generation.

The licensing procedure, however, is conducted via the Nationwide Mortgage Licensing System (NMLS). You need to submit your application and supporting paperwork through the website.

The requirements of the Department of Financial Services include:

  • Completed company form MU1
  • Trade name or assumed name registration documents
  • Formation documents
  • Business plan
  • Management and organizational charts
  • Resident or registered agent for your New York office
  • Information on primary and non-primary contact employees
  • Disclosure questions for control persons
  • Completed form MU2 for control persons
  • Credit reports for control persons
  • Personal financial statements
  • Certificate of Authority/Good Standing Certificate
  • Copy of Word Approval Authorization Certificate submitted to the Department of State
  • Workers compensation insurance
  • A surety bond with the amount based on the number of New York applications

You can review the complete checklist in this document. In addition, you or one of your employees needs to have a minimum of two years of credit analysis or underwriting experience with an exempt organization, mortgage banker, mortgage broker or licensed lender.

The required licensing fees are as follows:

  • $100 NMLS processing fee
  • $1,500 investigation fee
  • $15 credit report fee per control person

How to obtain a mortgage broker bond

new york mortgage broker license

Providing a surety bond is an indispensable requirement for obtaining your New York mortgage broker license. The bond amount has to be between $10,000 and $100,000. It is set on the basis of the number of applications you have in New York that you have submitted in the annual Volume of Operations Report (VOOR).

The respective amounts are the following:

  • $10,000 – 0-24 applications
  • $25,000 – 25-99 applications
  • $50,000 – 100-299 applications
  • $75,000 – 300-599 applications
  • $100,000 – more than 600 applications

Depending on the bond amount, your surety bond cost is set as a percentage of it. The price you have to pay is based on the strength of your finances. The factors that matter include your personal credit score, company finances, and any assets and liquidity. The stronger your profile is, the lower the bond cost is likely to be. Applicants with stable profiles typically get premiums between 1% and 5% of the required bond amount.

For further questions about getting licensed and bonded in the state of New York, our experts can help. You can speak to one of them by calling us at 877.514.5146.

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Victor Lance is the founder and president of Lance Surety Bond Associates, Inc. He began his career as an officer in the U.S. Marine Corps, serving two combat tours. As president of Lance Surety, he now focuses on educating and assisting small businesses throughout the country with various license and bond requirements. Victor graduated from Villanova University with a degree in Business Administration and holds a Masters in Business Administration (MBA) from the University of Michigan's Ross School of Business.

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