Your Easy Texas Mortgage Broker License Guide

Published: May 24, 2019
texas mortgage broker license

 

The first step to realizing your business endeavor as a mortgage broker in Texas is to obtain a state license. This is an obligatory procedure as in most other states. By doing this, relevant authorities ensure that you will be able to conduct mortgaging activities in legal compliance with the state.

Getting a Texas mortgage broker license requires that you meet a list of criteria set by the state. The licensing authorities are the Department of Savings and Mortgage Lending and the Office of Consumer Credit Commissioner; which license you need depends on the exact activities you want to conduct.

For most license types, bonding is not required. However, if you want to get a mortgage broker license, you will have to post a state mortgage broker bond. This is a safety instrument which protects your customers’ rights.

In the guide below, you can get the key information about the licensing process and all the requirements so that you can take the right steps to launch your Texas mortgage brokership.

The Texas mortgage broker license requirements

The Department of Savings and Mortgage Lending

Most residential mortgage loan originators (RMLO) in Texas have to undergo a licensing procedure with the Department of Savings and Mortgage Lending. As for other financial professionals, the process is handled via the website of the Nationwide Mortgage Licensing System (NMLS).

You have to obtain a mortgage company license (Form MU1) for your business entity, as well as a mortgage loan originator license (Form MU4) for each employee originating loans.

The requirements for the company license that you have to fulfill include:

  • Business entity documents from the Secretary of State
  • Trade names
  • Disclosure questions
  • Contact employee information
  • Resident/Registered Agent information

In order to obtain an individual mortgage loan originator license, you have to provide the following:

  • 23 hours of pre-licensure education
  • Successful completion of the testing
  • Criminal background check
  • Credit report
  • Disclosure questions

If you also want to engage in mortgage loan servicing, you will need a separate license. The process entails obtaining a surety bond.

The licensing costs are as follows:

  • $150 company license fees
  • $190 mortgage loan originator fees
  • $350 mortgage loan servicer fees

The Office of Consumer Credit Commissioner

You may need a license from the Office of Consumer Credit Commissioner if you originate certain types of loans:

  • secondary loans (unless you are licensed by the Department)
  • home-equity loans (unless you are licensed by the Department)
  • residential property tax loans
  • manufactured housing loans

The licensing procedure is also handled by the NMLS.

The requirements for an OCCC license are:

  • 20 hours of pre-licensure education
  • Successful completion of the testing
  • Criminal background check
  • Credit report
  • Disclosure questions
  • Company sponsorship form

Obtaining a surety bond

texas mortgage broker license

Mortgage loan servicers in Texas have to get bonded as part of their licensing. The bonding ensures you will follow the law in your operations. It protects the state and your customers against potentially illegal activities you may engage in as a servicer.

The bond amounts are based on your servicing volume. If it is below $25 million, the bond has to be $25,000, while if is above that amount, the bond has to be $50,000. On the basis of the required amount you have to provide, the bond premium is formulated as a fraction of it. The typical rates are between 1% and 5% for applicants with stable finances.

The factors that determine your bond cost include your personal credit score, company finances, any fixed and/or liquid assets, as well as relevant professional experience. The stronger these indicators are, the lower your bond premium will be.

Do you have any questions about the bonding process for Texas mortgage loan servicers? Don’t hesitate to contact us at 877.514.5146 and get assistance from our bonding experts.

The following two tabs change content below.
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.