How to Get a New Jersey Mortgage Broker License

Category: Licensing Guides
Published: Oct 15, 2019

 

Mortgage brokers in New Jersey have to obtain a license from the state Department of Banking and Insurance. If you want to launch a brokerage in the state, you have to go through this process, so that authorities verify your suitability for this profession. 

In order to get a NJ mortgage broker license, you need to meet a list of requirements. They ensure your legal compliance. Among them is posting a New Jersey mortgage broker bond, which serves as a protection mechanism for the state and your customers. 

To get prepared for the licensing procedure, you can review the criteria that you have to satisfy in the guide below, including how to get bonded. 

How to become a mortgage broker in NJ

If you want to engage in mortgage brokering activities in New Jersey, you need to get a residential broker license from the state Department of Banking and Insurance. The license is necessary if you engage in the following activities:

  • Directly or indirectly taking a residential mortgage loan application for others
  • Negotiating, placing or selling for others, or offering to take an application for, negotiate, place or sell, residential mortgage loans for others 

You have to apply through the Nationwide Multistate Licensing System & Registry (NMLS) by completing the application form. Together with it, you have to submit a list of additional documents:

  • Company form MU1 
  • Information about your resident/ registered agent in the state
  • Details about at least one qualifying individual in your company
  • Answers to disclosure questions
  • Financial statements proving tangible net worth of at least $50,000
  • Certificate of Authority/Good Standing Certificate
  • Entity formation documents
  • Organizational chart
  • Certification of office suitability
  • FBI criminal background check for all direct and indirect owners, executive officers and qualifying individuals (MU2 individuals)
  • NJ criminal history background check for every officer, director, partner, member, owner of 10% or more (direct or indirect) or other principal 
  • $150,000 surety bond

You also have to cover the applicable fees, which include $1,300 licensing fees and $36.26 FBI criminal background check fee per person. 

Getting the residential mortgage broker bond

nj mortgage broker license

All applicants for a NJ mortgage broker license need to meet the surety bond requirement. The amount that you have to post is $150,000 in the official bond form.  

The purpose of the bond is to safeguard the interests of your customers. It guarantees your compliance with relevant legislation, such as the New Jersey Residential Mortgage Lending Act (RMLA). In case you fail to abide by applicable laws, a harmed party can file a claim against your bond to seek fair compensation. 

In order to get bonded, you don’t need to pay the full bond amount of $150,000. Instead, you have to cover a fraction of it, which is called the bond premium. It is formulated on the basis of the perceived risk that you pose as a bond candidate. If your finances are solid, the risk is lower. In such cases, you can expect rates between 0.5% to 5%, or $750 to $7,500. 

Need more information about your New Jersey mortgage broker bond and licensing? You can get in touch with 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.