Federal Reserve Bank of Minneapolis - Community Development - Compilation of State Mortgage Broker Laws and Regulations

FEDERAL RESERVE BANK OF MINNEAPOLIS COMMUNITY AFFAIRS REPORT

Report No. 2007-2

A Compilation of State Mortgage Broker Laws and Regulations, 1996–2006

Cynthia Pahl

Research Assistant ▪ Community Affairs

October 2007

A report series from the Community Affairs Department of the Federal Reserve Bank of Minneapolis.

The views expressed here are those of the author and not necessarily those of the Federal Reserve Bank of

Minneapolis or the Federal Reserve System.

EDERAL RESERVE BANK OF MINNEAPOLIS COMMUNITY AFFAIRS REPORT

Report No. 2007-2: A Compilation of State Mortgage Broker Laws and Regulations, 1996–2006

Published October 2007

Author: Cynthia Pahl

Community Affairs Research Assistant

Federal Reserve Bank of Minneapolis

Editor: Richard M. Todd

Vice President

Federal Reserve Bank of Minneapolis

The contents of this report are provided for informational purposes only and are not intended as a substitute for legal

advice. The views expressed herein are those of Cynthia Pahl and do not necessarily represent those of the Board of

Governors of the Federal Reserve System or the Federal Reserve Bank of Minneapolis. Due to the volume,

complexity, and mutability of state laws, regulations, and administrative decisions, neither Cynthia Pahl nor Richard

M. Todd nor the Federal Reserve Bank of Minneapolis can guarantee the accuracy of the information in this report.

As editor, Richard M. Todd welcomes comments and suggestions for improving this report and its supplements so

that the information they contain will accurately reflect state mortgage broker regulations as of April 2007. Please

send comments to the attention of Richard M. Todd at [email protected].

Table of Contents

Introduction .................................................................................................................................................................4

An Overview of Occupational Licensing ...................................................................................................................4

Trends in the Data.......................................................................................................................................................5

About the Data...........................................................................................................................................................12

Alabama......................................................................................................................................................................14

Alaska .........................................................................................................................................................................16

Arizona .......................................................................................................................................................................17

Arkansas.....................................................................................................................................................................19

California....................................................................................................................................................................22

Colorado.....................................................................................................................................................................26

Connecticut ................................................................................................................................................................28

Delaware.....................................................................................................................................................................31

District of Columbia..................................................................................................................................................33

Florida ........................................................................................................................................................................35

Georgia.......................................................................................................................................................................38

Hawaii.........................................................................................................................................................................42

Idaho...........................................................................................................................................................................45

Illinois .........................................................................................................................................................................49

Indiana........................................................................................................................................................................52

Iowa.............................................................................................................................................................................55

Kansas.........................................................................................................................................................................57

Kentucky ....................................................................................................................................................................60

Louisiana....................................................................................................................................................................64

Maine..........................................................................................................................................................................68

Maryland....................................................................................................................................................................71

Massachusetts ............................................................................................................................................................76

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Michigan.....................................................................................................................................................................79

Minnesota...................................................................................................................................................................81

Mississippi..................................................................................................................................................................83

Missouri......................................................................................................................................................................87

Montana......................................................................................................................................................................89

Nebraska.....................................................................................................................................................................92

Nevada........................................................................................................................................................................95

New Hampshire .......................................................................................................................................................100

New Jersey................................................................................................................................................................104

New Mexico..............................................................................................................................................................109

New York..................................................................................................................................................................111

North Carolina.........................................................................................................................................................114

North Dakota ...........................................................................................................................................................117

Ohio...........................................................................................................................................................................120

Oklahoma.................................................................................................................................................................124

Oregon......................................................................................................................................................................129

Pennsylvania ............................................................................................................................................................132

Rhode Island ............................................................................................................................................................135

South Carolina.........................................................................................................................................................138

South Dakota............................................................................................................................................................141

Tennessee..................................................................................................................................................................145

Texas.........................................................................................................................................................................148

Utah...........................................................................................................................................................................152

Vermont....................................................................................................................................................................157

Virginia.....................................................................................................................................................................159

Washington ..............................................................................................................................................................161

West Virginia ...........................................................................................................................................................165

Wisconsin..................................................................................................................................................................169

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Wyoming ..................................................................................................................................................................172

For More Information.............................................................................................................................................175

Appendix A: Terms.................................................................................................................................................176

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Introduction

This document catalogs and summarizes the basic provisions of licensing and registration

policies that govern firms and individuals engaged in mortgage brokering activities in the 50

states and the District of Columbia. The intent is to facilitate further research on mortgage

broker regulation that can assist state governments in developing legislative priorities that will

result in optimal regulatory outcomes.

The catalog provides an annual status update of each state’s policy provisions during the period

1996–2006. Based on the status of selected provisions, a numerical code is assigned that

represents the relative restrictiveness of each state’s policy during each year in the period.

summary of the basic provisions and numerical code data is also presented below.

Nearly all of the data summarized in this document is also available in tabular or spreadsheet

format at www.minneapolisfed.org/community/pubs/reports.cfm.

An Overview of Occupational Licensing

In the United States today, occupational licensing systems, like those for mortgage brokers, exist

for hundreds of occupations. Although many factors have driven the growth of occupational

licensing, two factors have been influential in the policy arena. The first is growing consumer

demand for protection from deceitful and incompetent professionals. The second is growing

support for occupational regulation by professional associations, because regulation can protect a

profession’s reputation by increasing both the quality of providers and quality of output. Also,

because regulation can raise wages for those licensed by reducing competition. In response to

these demands, lawmakers are increasingly relying on occupational licensing systems as a

solution.

A typical licensing policy has provisions that seek to safeguard the public from devastating

losses. Such provisions include requirements that guarantee licensees have the appropriate

education or experience necessary to act competently and professionally; requirements that

ensure licensees have the appropriate financial condition and credibility to operate lawfully and

to compensate claimants when found guilty of wrongdoing; requirements that provide rules of

business conduct for licensees; and rules that define the license or registration suspension and

revocation process.

Because typical licensing policies deny nonlicensees the right to engage in certain activities,

licensees also derive benefit from occupational licensing policies. Licensing limits a consumer’s

choice of providers for a particular service to only those licensed to provide that service.

Furthermore, pre-licensing requirements restrict the supply of professionals to a particular pool

of individuals that qualify for licensure. Basic labor economics and mounting academic

evidence suggest that limiting the supply of licensed professionals increases the wages of those

who are licensed. Moreover, academic evidence also suggests that the quality of services in a

licensed occupation can decrease, rather than increase as intended, over the long run.

For more information on the variables used to determine the state’s summary code, see

www.minneapolisfed.org/community/pubs/mortgagebrokerregs/definitions.pdf.

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Trends in the Data

The focus of this summary is on the requirements states have imposed on mortgage broker

professionals seeking a license or registration over the past decade. The state-by-state overview

of the various provisions enacted provides a broad perspective of each state’s growth in

regulatory restrictiveness and overall trends in mortgage broker regulation.

Over the past decade, the overarching trend in mortgage broker regulation has been the

movement towards stricter licensing and registration requirements. A comparison of the relative

restrictiveness of each state’s regulatory policy in 1996 indicates that only three states had a

“high” level of restrictiveness. Thirty-nine states (including eight states with no regulation) had

“low” levels of restrictiveness.

In 2006, Alaska was the only state that had no regulation of

mortgage brokers. The number of states that had high levels of restrictiveness had increased to

18 and those with low levels decreased by more than half. While many state legislatures have

continuously added and expanded mortgage broker licensing and registration statutes, 12 states

remain at the same level of restrictiveness as measured in 1996. Only two of these states

(California and New Jersey) already had relatively strict licensing statutes in effect.

Distribution of States by Summary Code

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

# of States

Average Summary Code

# States with High Level of Restrictiveness (Summary code 9 and above)

# States with Medium Level of Restrictiveness (Summary code 5 through 8)

# States with Low Level of Restrictiveness (Summary code 4 and below)

Average Summary Code (All States)

Figure 1: Restrictiveness of Licensing Policies based on Summary Codes.

Although many stark differences exist across state licensing policies, three principal modes of

mortgage broker regulation can be extrapolated from the data. While states are converging on an

The criteria used to categorize licensing policies are somewhat arbitrary. For this comparison, 1996 summary

codes ranged from 0 to 13 and these values were divided into three categories. Each state was placed in a category

based on its summary code (9 and above [High Level of Restrictiveness], 5 through 8 [Medium Level of

Restrictiveness], and 0 through 4 [Low Level of Restrictiveness]). For more details, see

www.minneapolisfed.org/community/pubs/reports.cfm.

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overall higher level of restrictiveness, many states still have relatively unrestrictive policies.

These policies typically focus on restrictions for the firm, or “firm-only” policies. The common

firm-only policy requires the individual, sole proprietor, or control person of an entity applying

for the license to fulfill an experience or education requirement. It also requires the firm to post

a bond or maintain a minimum net worth as a requirement of licensure. Stricter firm-only

policies tend to also require the licensee or registrant to maintain an office within the licensing

authority’s jurisdiction. Alabama goes a step beyond the common firm-only policy and requires

that all of the applicant’s principals and officers who will engage in mortgage brokering

activities obtain 12 hours of pre-licensing education. The licensing policy in the South Dakota,

on the other hand, has no statutory requirements for pre-licensing education or experience and no

in-state office requirement.

A second mode of regulation is the “firm-employee” regulatory policy. The variance within this

mode of regulation is the greatest of the three modes discussed here. The common firm-

employee policy has the same restrictions on the firm as the firm-only policy; that is, typically

one person within the firm must fulfill the pre-licensing or education requirement, the applicant

must post a bond or maintain a minimum net worth, and the applicant must maintain an office

within the licensing state. In addition, firm-employee policies place restrictions on individuals

employed by mortgage brokers that conduct brokering activities on behalf of the licensee or

registrant. Of the 29 states that currently place restrictions on employees, seven require that the

employee register or procure a license only, an additional seven require that the employee

period, and the remaining require some combination of pre-licensing experience, education, or

examination. While most states with an experience or education requirement permit an applicant

to substitute one for the other, Montana is the only state that requires employees who apply for a

license to demonstrate prior experience.

The last mode of regulation, the “firm-principal-employee” policy, appears to be gaining

popularity with state lawmakers. The firm-principal-employee policy is one that requires the

firm to obtain a mortgage broker license or registration, all control persons within the firm to

brokering activities on behalf of the firm to also be licensed or registered. The difference

between this mode and the firm-employee policy is the treatment of control persons within the

firm and, in some cases, the conditions under which a firm can obtain a license. In states such as

Kentucky, North Carolina, Iowa, and Indiana, sole proprietors and individuals seeking a firm

license must also register or procure a license as an employee if conducting brokering activities.

Moreover, control persons of entities other than sole proprietorships must also procure a license

or registration if conducting originating activities.

Some states go a step beyond and require that one individual in the firm holds the same type of

license the firm is seeking, e.g., a corporation seeking a license as a mortgage broker must

employ an individually licensed mortgage broker. Florida requires any firm seeking a license as

a mortgage broker business to employ an individually licensed “Qualified Principal Broker” who

has been licensed as a “Mortgage Broker Individual” for at least one year. (Florida requires that

all individuals conducting mortgage brokering activities on behalf of a licensee be licensed as

mortgage broker individuals. To obtain a mortgage broker individual license, the applicant must

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complete 24 hours of pre-licensing education and pass an examination.) Texas law is yet another

alternative of the firm-principal-employee policy. Texas has no firm licensing, but requires any

individually licensed mortgage broker conducting activities under a corporation or other business

entity to report the corporation or entity to the state. In addition, all individuals conducting

brokering activities in Texas must either be licensed as mortgage brokers or as loan originators

(employees).

The common modes of mortgage broker licensing policies contain typical competency

requirements can be easily compared to other professional occupational licensing policies.

When comparing the two, mortgage broker licensing tends to be less restrictive overall. The

number of states mandating pre-licensing education, experience, or some combination of both for

the applicant or the applicant’s control persons has doubled over the last decade, but is still less

than half of all the states.

Just two states require pre-licensing education only; seven states

require either pre-licensing education or experience; and seven states require experience only.

Moreover, examination requirements for applicants or an applicant’s control persons are quite

rare. Currently, only four states require successful completion of an examination by an applicant

or an applicant’s control person.

Overview of Competency Requirements For Individuals or

Control Persons of Business Entities Seeking a Mortgage

Broker License

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

# of States

# States Requiring Both Education and Experience

# States Requiring Education or Experience

# States Requiring Experience Only

# States Requiring Education Only

Figure 2: Experience and Education Requirements for Applicants

Seeking Licensure as a Mortgage Broker Entity

Control persons are typically defined as the owner thereof if the license applicant is a sole proprietor, the members

thereof if the license applicant is a partnership or association, the officers and directors thereof if the license

applicant is a corporation, and the managers and members that retain any authority or responsibility under the

operating agreement if the license applicant is a limited liability company.

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Overview of Examination Requirements for Applicants, an

Applicant's Control Person, or an Applicant's

Managing Principal

1996 1997 1998 19992000200120022003200420052006

# of States

# States Requiring an Examination for Applicant's Managing Principal

# States Requiring Experience or Exam for Applicant's Managing Principal

# States Requiring an Examination for an Applicant or Control Person

One of the more interesting trends is the requirement for an applicant to designate an individual

or “Managing Principal” that will be responsible for the applicant’s operations. Many of the

states that have an education, experience, or examination requirement for a control person

require that the same individual also be designated as the managing principal.

Overview of Competency Requirements for the Managing

Principal of Business Entities Seeking a Mortgage

Broker License

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

# of States

# States Requiring Experience or Exam

# States Requiring Both Education and Experience

# States Requiring Education or Experience

# States Requiring Experience Only

# States Requiring Education Only

Figure 4: Experience and Education Requirements for Managing

Principals of Entities Seeking a Mortgage Broker License

Figure 3: Examination Requirements for Individual Applicants, an

Applicant’s Control Person, or an Applicant’s Managing Principal

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Sidebar: Summary of Separate Provisions for

Responsible Individuals and Managing Principals

Arizona applicants must designate a “Responsible Individual”

(RI) who meets the statutory requirements. The responsible

individual does not need to be a control person.

Connecticut requires any individual with supervisory authority

to have three years of experience in the mortgage lending

industry. If the individual is a control person of the applicant,

the individual does not have to be separately licensed. If the

individual is not a control person, the individual must be

separately licensed.

Florida mortgage broker businesses must have a “Qualified

Principal Broker” in order to engage in the business of

brokering. The qualified principal broker must be a licensed

associate and have at least one year of experience.

Idaho applicants are required to designate a “Qualified

Person in Charge” who meets the experience requirement.

Applicants for licensure in Mississippi must designate a

“Principal Officer.” The principal officer must be licensed as a

loan officer and meet statutory experience requirements.

Nevada applicants must designate a “Qualified Employee”

who meets the experience requirement for licensure.

New Hampshire law requires applicants to have one person in

a supervisory capacity who has at least three years of

experience.

In New Jersey, entities other than sole proprietorships must

obtain both an entity license and must have at least one

individual who is licensed separately.

Ohio applicants must designate an “Operations Manager”

who may be either an employee or owner. The operations

manager must meet the experience requirement, pass an

examination, and complete annual continuing education

courses. In addition, the operations manager must be

licensed as a loan officer.

Oklahoma requires an applicant to designate a “Designated

Person Responsible” who meets the qualifications for

licensure. If the designated person responsible is someone

other than a control person, the designee must obtain a

license if engaging in origination activities. Regardless of

whether he or she is the designated person responsible, an

owner or officer must pass the examination and provide proof

of three years of experience.

Each applicant for licensure in Pennsylvania must have a

“Mortgage Professional” who will obtain the required

continuing education.

Rhode Island applicants must have a manager or person

designated to operate the business who has the experience

required by law.

Utah law requires an applicant to designate a licensed

“Principal Lending Manager” in order to obtain a license. The

principal lending manager must meet strict requirements for

licensure.

In Washington, the applicant must appoint a “Designated

Broker” who meets the experience or education requirement

and passes an examination. The designated broker is

automatically licensed as a loan originator if not already

licensed as such at the time of designation.

Some of these states also require that the managing

principal obtain a separate license or registration as

an employee (generally referred to as a “Loan

Originator”) if the managing principal intends to

engage in brokering activities (in Indiana,

Kentucky, and North Carolina, sole proprietors

designating themselves in the application are also

required to obtain an individual license or

registration). A growing number of states allow an

applicant to appoint a managing principal who is

not one of the applicant’s control persons. In some

cases, the managing principal must be a licensed

mortgage broker or a licensed loan originator.

Arizona, Connecticut, Florida, Idaho, Mississippi,

Nevada, New Hampshire, New Jersey, Ohio,

Oklahoma, Pennsylvania, Rhode Island, Utah, and

Washington all have similar provisions for

designating a person responsible, but have different

requirements for the managing principal. (See the

sidebar at right for more details.)

A key component of most occupational licensing

policies is the necessity of the applicant to

demonstrate financial credibility and responsibility.

Depending on the occupation, a licensee may be

required to maintain malpractice insurance to

demonstrate the ability to compensate a claimant.

Licensees may also be required to maintain a

minimum net worth or financial solvency to

demonstrate their ability to fulfill their financial

obligations, and others may be required to obtain

surety bonds that demonstrate both financial

credibility and willingness to perform under the

terms set forth in the bond. In 1996, 19 states had

no financial credibility requirements for mortgage

brokers. Currently, only six states have no such

requirements.

The most common demonstration of a mortgage

broker applicant’s financial credibility is the surety

bond requirement. State legislatures have both

enacted new bonding requirements and increased

the bond amount required over the past decade. In

comparison to 20 states a decade ago, only nine

states have no bonding requirement today. Most

states typically require a licensee to maintain a

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bond between $25,000 and $50,000, while Tennessee, Pennsylvania, New Jersey, and Illinois

require a bond in amount excess of $50,000. Kansas and Wisconsin require licensees that do not

operate an in-state office to maintain a bond in the amount of $100,000 and $120,000,

respectively. New York and New Jersey require a licensee to maintain a bond in an amount that

depends on the number of mortgage applications taken by the licensee during the previous year,

Washington requires a licensee to maintain a bond in an amount that varies by the number of

loan originators employed by the licensee during the previous year, and the District of Columbia

and Maryland require a bond amount based on the aggregate principal amount of loans secured

by the licensee during the previous year. In addition, about a quarter of states with bonding

requirements also require additional penal sums for each branch office. Although the growth of

branch bonding has not been rapid, the number of states mandating it has increased from five to

ten over the last decade.

While many states have been tightening the bonding requirements over the past decade, net

worth requirements—another demonstration of financial credibility and reliability—have gained

little momentum in the legislative arena. In 1996, eight states required that licensees maintain a

minimum net worth and one state required licensees to either maintain a bond or a minimum net

worth. Currently, only 13 states mandate a minimum net worth for licensees. An additional five

states mandate that licensees either maintain a bond or a minimum net worth. Typical net worth

requirements for licensees are $25,000, with some exceptions. Illinois and New Jersey require

an applicant to have $50,000 in net worth. Kansas and Wisconsin require applicants without a

bona fide office to maintain a net worth of $50,000 and $250,000, respectively. Louisiana

requires that an applicant maintain either a $50,000 bond or $50,000 in net worth, Nevada

requires a minimum net worth based on the amount a mortgage broker holds in trust or escrow,

and New Hampshire requires proof of positive net worth.

States with Employee Regulations

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

# of States

Figure 5: Number of States with Employee Regulations

By far the most sweeping trend in mortgage broker regulation has been the inclusion of licensing

or registration requirements for employees who conduct certain brokering activities on behalf of

licensees. In 1996, only six states had requirements relating to employees. Currently, 30 states

require that employees of licensees either register or obtain a license. In addition, over one-third

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of these states require that employees pass an examination and over two-thirds require that

employees obtain continuing education to renew their license or registration. Montana is the

only state that requires an employee seeking a license as a loan originator to have six months

experience in a related field. Maryland, Oklahoma, South Carolina, and Texas also have an

experience requirement for employees of mortgage brokers, but if the applicant cannot satisfy the

experience requirement, the applicant may substitute education and/or pass an examination,

depending on the state. Seven states require that an applicant fulfill specific pre-licensing

education requirements. These requirements range from one course to 40 hours of classroom

instruction.

Overview of Competency Requirements for Employees

Seeking Licensing or Registration

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

# of States

# States Requiring Employee Experience or Examination

# States Requiring Employee Experience or Education/Examination

# States Requiring Employee Education or Experience

# States Requiring Employee Experience

# States Requiring Employee Education

Overview of Examination Requirements for Employees

Seeking Licensure or Registration

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

# of States

# States Requiring Employee Examination

# States Requiring Employee Experience or Examination

# States Requiring Employee Experience or Education/Examination

Figure 6: Growth in Competency Requirements for Employees of Licensees

Figure 7: Growth in Examination Requirements for Employees of Licensees

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About the Data

Most of the data catalogued in this document was acquired from state statutes relating to the

licensing or registration of individuals and businesses engaged in mortgage brokering activities.

Historical and current statutes were reviewed for reference to common barriers to entry, such as

pre-licensing education, experience, and examination requirements for sole proprietors, officers,

principals, directors, managers, and employees; net worth and bonding requirements; and office

requirements.

(See www.minneapolisfed.org/community/pubs/mortgagebrokerregs/navigationguide.pdf.)

Beginning with a base year of 1996, information that was relevant to any of the variables was

recorded. In each subsequent year, any amendment that took effect in that year that substantially

altered the significance of a previously recorded variable or made any new reference to a

previously unrecorded variable was cataloged. Information for 2006 was cross-checked against

information in the iComply database maintained by Lotstein and Buckman.

Given the intertwined scope of work in both the mortgage lending and brokering industries,

many states grant licensed or registered mortgage lenders the right to broker loans under their

mortgage lending license or registration. Similarly, most financial institutions regulated by state

or federal agencies are allowed to broker mortgage loans without obtaining a separate mortgage

broker license or registration. While the vast range of exempted institutions and professions

increases the supply of mortgage brokers, most exempted entities and professions are subject to

tighter regulation than a business brokering mortgage loans only. The data presented here do not

address the regulations that govern exempted entities, but are limited strictly to individuals, sole

proprietors, partnerships, limited liability companies, corporations, and other business entities

that intend to engage solely in the business of brokering first lien mortgage loans.

Furthermore, only variables that had a direct relation to occupational entry for individuals or

entities wishing to engage solely in the business of brokering mortgage loans were selected.

Therefore, this research should not be construed as an exhaustive documentation of regulation in

the mortgage broker profession. Most laws that govern the licensing or registration of mortgage

brokers also have statutory provisions relating to how a mortgage broker can conduct his

business once licensed or registered. For example, there are typically rules for trust and escrow

accounts, advertising practices, disclosure requirements, and others that were not documented

during this review. Although one could conceivably argue that stringent rules governing how a

broker may conduct his business while licensed or registered could act as a barrier to entry, the

scope of such an analysis was beyond the focus of this particular research.

The information documented in this report should also not be construed as a legal interpretation

of the laws that have governed mortgage brokers over the past decade. Generally, the exact

language of the statute was cataloged, leaving interpretation to the reader. Readers must be

aware that in many instances, the statutory language was either nonexistent or ambiguous and

required a certain level of personal interpretation. Administrative rules and regulations that often

clarify such ambiguity were not readily available prior to 2002. Inaccessible administrative

codes also present another potential limitation because they may have contained regulations

specific to the barriers researched for this project. While the constraint exists, it is unlikely that

Page 12

rules and regulations contained in the older administrative codes would have had a substantial

impact on the data presented here.

Page 13

Alabama

§5-25-1 et seq.

http://www.banking.alabama.gov/

Regulation effective since: January 1, 2002

Alabama

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Alabama’s State Banking Department administers the Mortgage Brokers Licensing Act. In

2002, Alabama licensed 340 mortgage brokers and in 2003, the state licensed 415 mortgage

brokers.

Since its effective date in January 2002, few substantive changes have been made to

the licensing statute. In comparison to other licensing statutes, the provisions of the Mortgage

Brokers Licensing Act may be characterized as somewhat unrestrictive. The act requires that the

applicant or the applicant’s officers and principals who will actively engage in the business

obtain 12 hours of pre-licensing education. The applicant must maintain a $25,000 surety bond

and a physical presence in the state. The Mortgage Brokers Licensing Act requires applicants to

submit six letters of reference, including three concerning the applicant’s good name and

reputation in the community and three letters of reference from individuals or companies in the

lending industry concerning the applicant’s experience and expertise. Alabama does not

separately license or register employees of licensed mortgage brokers at this time.

Alabama

Year Status

1996 No regulation

1997 No regulation

1998 No regulation

1999 No regulation

2000 No regulation

2001 No regulation

2002 Change: Licensing implemented

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

http://www.bank.state.al.us/pdfs/Annual%20Reports/State%20Banking%20Bd%2004.pdf

Page 14

Experience

• None

Education

• The applicant or the officers and principals who are or will be actively engaged in the daily

operation of a mortgage company in the state of Alabama are required to complete twelve

hours of pre-licensing education.

Examination

• None

Fitness

• The applicant is required to submit six letters of reference; three concerning the applicant's

good name and reputation in the community and three letters of reference from individuals

or companies in the lending industry concerning the applicant's experience and expertise.

• The applicant and its officers, directors, and principals are required to demonstrate good

character, an ethical reputation, reasonable financial responsibility, and the ability to

operate honestly and fairly.

Net Worth

• The applicant must maintain $25,000 in net worth. (The applicant must submit a recent

financial statement to show proof of net worth.)

Bond

• None

Background Investigation

• The applicant must agree to a criminal background and credit history check. (Assumption:

this applies to officers, directors, and principals of the applicant.)

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• A natural person, who is employed by a licensed mortgage broker when acting within the

scope of employment with the licensee, is exempt.

• A natural person, who solicits mortgage loans exclusively on behalf of a licensed mortgage

broker when the natural person is acting within the scope of the agency of the licensee, is

exempt.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

• Consumer loan companies

• Securities broker-dealers

Safe Harbor

• Any person who acted as a mortgage broker on no more than one mortgage loan during the

preceding calendar year is exempt.

Branch Offices

In-state Requirement

• A licensee is required to maintain an office in-state.

License Requirement

• A licensee is required to obtain a separate license for each branch office.

Branch Manager

• None

Licensing Fees

Initial Application

• $100 Investigation Fee

• $500 Licensing Fee

Branch Application

• $100 Investigation Fee

• $500 Licensing Fee

Renewal Application

• $500 Licensing Fee (Annually)

• $500 Branch Renewal Fee

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

2003 No change

2004 No change

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2005 No change

2006 No change

Alaska

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Alaska is the only state that does not regulate the mortgage brokering industry. Two bills that

would have enacted licensing statutes for mortgage brokers were introduced during the most

recent legislative session but failed to successfully pass through both chambers. Senate Bill 272

passed in the Senate on May 2, 2006, but remained in the House Labor and Commerce

Committee when the Legislature adjourned on May 8, 2006; House Bill 424 was referred to the

House Judiciary Committee where no action has been taken since March 2006.

Alaska

Year Status

1996 No regulation

1997 No regulation

1998 No regulation

1999 No regulation

2000 No regulation

2001 No regulation

2002 No regulation

2003 No regulation

2004 No regulation

2005 No regulation

2006 No regulation

Page 16

Arizona

§6-901 et seq.

http://azdfi.gov/index.html

Regulation effective since: August 13, 1971

Arizona

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The State of Arizona regulates mortgage brokers under Chapter 9 of Title 6 of the Arizona State

Revised Statutes. Arizona’s Department of Financial Institutions currently regulates

approximately 2,201 mortgage broker licensees and an additional 821 branch offices throughout

the state.

Although Arizona has fairly strict competency requirements, in comparison to other

mortgage broker regulations, the statute is less restrictive. The policy requires that either the

applicant or the person designated by the applicant have at least three years of experience as a

mortgage broker or equivalent mortgage lending experience, complete a course of study, and

pass an examination before a license will be issued. Arizona also has bonding requirements of

either $10,000 or $15,000 and requires a physical presence in the state.

Arizona does not require that employees of licensees register or obtain a license, but it does

require that licensees conduct a reasonable investigation of the background, honesty,

truthfulness, integrity, and competency of any individual seeking employment with the licensee.

Arizona

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• The applicant or one officer, director, member, partner, employee, or trustee of the

applicant must be designated in the license as the individual responsible and must have at

least three years’ experience as a mortgage broker or equivalent lending experience in a

related business during the five years immediately preceding the time of application.

Education

• The applicant or one officer, director, member, partner, employee, or trustee of the

applicant must be designated in the license as the individual responsible and must have

http://azdfi.gov/Lists/MB_List.HTML

Page 17

satisfactorily completed a course of study approved by the superintendent during the three

years immediately preceding the time of application.

Examination

• The applicant or one officer, director, member, partner, employee, or trustee of the

applicant must be designated in the license as the individual responsible and must pass an

examination.

Fitness

• The applicant is required to demonstrate experience, background, honesty, truthfulness,

integrity, and competency.

Net Worth

• None

Bond

• The bond required is $10,000 for a licensee whose investors are limited solely to

institutional investors and $15,000 for a licensee whose investors include any

noninstitutional investors.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• If the applicant is a sole proprietor and is not a resident of Arizona, an employee of the

applicant must be designated in the license as the individual responsible for the applicant.

• If the applicant is a person other than a natural person, one officer, director, member,

partner, employee, or trustee of the applicant must be designated in the license as the

individual responsible for the applicant.

• A responsible individual may not be an independent contractor.

• A responsible individual must be a resident of Arizona, must be in active management of

the activities of the licensee, and must meet the qualifications set forth for a licensee. (See

experience, education, and examination requirements above.)

Employee Exemptions

• The license issued entitles all officers, directors, members, partners, trustees and employees

of the licensed corporation, partnership, association or trust to engage in the mortgage

business.

• A person who is employed by a licensee to act in the capacity of a mortgage broker shall

not be concurrently employed by any other licensee to act as a mortgage broker, except

with the prior written approval of all the concurrently employing licensees.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Insurance companies

• Consumer loan companies

Safe Harbor

• Limited. A natural person may make up to five mortgage loans in a calendar year if he or

she makes the mortgage loans with his or her own monies, for his or her own investment,

without the intent to resell them.

Branch Offices

In-state Requirement

• The licensee is required to maintain an office in-state.

License Requirement

• The licensee is required to obtain a separate license for each branch office.

Branch Manager

• A person designated to oversee the operations of a branch office must be knowledgeable

about the branch activities of the licensee, must supervise compliance by the branch with

applicable law and rules, and must have sufficient authority to ensure such compliance.

• One person may oversee more than one branch.

Licensing Fees

Initial Application

• $800 Licensing Fee

Branch Application

• $250 Licensing Fee

Renewal Application

• $250 or $500 Renewal Fee (Annually—A licensee that negotiates or closes in the aggregate

50 loans or less in the immediately preceding calendar year must pay a renewal fee of $250

and a licensee that negotiates or closes in the aggregate more than 50 loans in the

immediately preceding calendar year must pay a renewal fee of $500.)

• $200 Branch Renewal Fee

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• A licensee shall not employ any person unless the licensee conducts a reasonable

investigation of the background, honesty, truthfulness, integrity, and competency of the

Page 18

employee before hiring.

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 No change

2000 No change

2001 No change

2002 No change

2003 No change

2004 No change

2005 No change

2006 No change

Changes with unknown effective date

Background Investigation

• If the applicant is an individual, the individual must submit fingerprints. If the applicant is a

corporation, each of the five highest corporate officers and the Responsible Individual must

submit fingerprints. In the event the corporation has only one officer, then any manager(s),

director(s), or anyone in a managerial/responsible position must submit fingerprints.

Arkansas

§23-39-501 et seq.

http://www.securities.arkansas.gov/

Regulation effective since: March 28, 1977

Arkansas

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

An amendment passed in 2003 made sweeping changes to Arkansas’ regulatory structure for

mortgage brokers. Prior to January 1, 2004, mortgage brokers were registered with the state as

loan brokers and were required to have $25,000 in net worth and a $25,000 bond. Since 2004,

the state has required that both mortgage brokers and their employed loan officers obtain a

license from the Arkansas Securities Department pursuant to the Fair Mortgage Lending Act.

Requirements for licensure as a mortgage broker include three years of experience (if the

applicant is a person other than a sole proprietor, then at least one manager, officer, or partner

must meet the experience requirement) and evidence of a $50,000 bond.

Applicants for a loan officer license have minimal requirements, but are required to demonstrate

their business history. The state currently has no continuing education requirements, but the

Page 19

statute does permit the director of the Securities Department to promulgate rules requiring

continuing education of licensees not to exceed eight hours per year.

Arkansas

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• A natural person applying for an individual registration;

• A sole proprietor applying for a business registration;

• Any other business entity, however incorporated, applying for a business

registration.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate financial responsibility and experience.

Net Worth

• The applicant must maintain $25,000 in net worth.

Bond

• The applicant must maintain a $25,000 bond.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Employees are not required to register.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

• Securities broker-dealers

• Loan brokers are exempt if they do not receive a fee or other consideration other than from

the lender after financing is actually obtained.

Safe Harbor

• A mortgage broker may broker six or less loans without registering.

Branch Offices

In-state Requirement

• None

License Requirement

• None

Branch Manager

• None

Licensing Fees

Initial Application

• $250 Licensing Fee

Branch Application

• None

Renewal Application

• $150 Renewal Fee (Annually)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 No change

Page 20

2000 Change

Mortgage Broker Applicant

Bond

• The applicant must maintain a bond in the amount of $35,000.

2001 No change

2002 No change

2003 No change

2004 Change

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• The applicant must have three years of experience; if the applicant is a general or limited

partnership, at least one of its general partners must fulfill the experience requirement; if

the applicant is a corporation, at least one of its principal officers must fulfill the experience

requirement; and if the applicant is a limited liability company, at least one of its managers

must fulfill the experience requirement.

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate qualifications, financial condition, and business history.

Net Worth

• The applicant must submit audited financial statements reflecting a net worth of $25,000.

Bond

• The applicant must maintain a $50,000 bond.

Background Investigation

• The applicant and any of its partners, directors, executive officers, and/or controlling

persons must consent to a financial and business responsibility background investigation.

Continuing Education

• May be required after rules are promulgated; not to exceed eight hours.

Managing Principal

• The person meeting the experience requirement for the applicant must be designated as the

managing principal and must operate the business under that person’s full charge, control,

and supervision. The managing principal for a licensee may also serve as the branch

manager of one or more of the licensee’s branch offices.

(As of February 1, 2005, managing principals were required to submit a separate

application.)

Employee Exemptions

• An employee of a licensee whose responsibilities are limited to clerical and administrative

tasks for his or her employer and who does not solicit borrowers, accept applications, or

negotiate the terms of loans on behalf of the employer is not required to be licensed.

• A loan officer is not allowed to be employed simultaneously by more than one licensed

mortgage broker.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

• Securities broker-dealers

Safe Harbor

• None

Branch Offices

In-state Requirement

• The licensee is not required to maintain an office in-state.

License Requirement

• The licensee is required to obtain a separate license for each branch office.

Branch Manager

• A person designated to oversee the operations of a licensee’s branch office must be a

licensed loan officer.

(As of February 1, 2005, branch managers were required to submit a separate application.)

Licensing Fees

Initial Application

• $750 Investigation Fee

Branch Application

• $100 Licensing Fee

Renewal Application

• $350 Renewal Fee (Annually)

• $100 Branch Renewal Fee

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for a license as a “Loan Officer.”

Page 21

Age

• The applicant must be 18 years of age.

Residency

• None

Education

• May be required after rules are promulgated.

Experience

• None

Examination

• May be required after rules are promulgated.

Fitness

• The applicant must demonstrate financial responsibility, honesty, and experience.

Net Worth

• None

Bond

• None

Background Investigation

• The applicant must consent to a background investigation.

Continuing Education

• May be required after rules are promulgated; not to exceed eight hours.

License Fee

• $50

Renewal Fee

• $50 (Annually)

2005 No change

2006 No change

California

Business and Professions Code §10000 et seq.

http://www.dre.cahwnet.gov/licensees_sub.htm

California

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The State of California regulates mortgage brokering activities under three different laws: the

Real Estate Law; the Residential Mortgage Lending Act (RMLA); and the Finance Lenders Law.

A mortgage broker in California is typically licensed as a real estate broker by the Department of

Real Estate. The Department of Corporations licenses lenders under the RMLA and Finance

Lenders Law. These licensees are permitted to broker loans, but are restricted in how they may

conduct brokering activities. Under the RMLA, licensees may only provide brokerage services

to a borrower if the licensee first enters into a written agreement with the borrower and an

institutional lender. RMLA licensees are also restricted in the types of loans that they may

broker and the fees or charges that they can impose. Licensed finance lenders are allowed to

broker loans only to other licensed finance lenders; additionally, licensed finance lenders may

only sell and service loans they have originated or have been originated by other licensed

lenders.

Because they are typically licensed as real estate brokers, mortgage brokers in California have

tougher pre-licensing education and experience requirements. For example, an applicant for a

real estate broker license must have two years experience as a licensed real estate salesperson;

Page 22

must have completed at least eight courses as specified by the commissioner; and must have

passed an examination. No corporate entity may be granted a license unless a person is

designated responsible that meets the requirements for a real estate broker. Each broker

employed by the corporation must also fulfill the same requirements and may not be

simultaneously employed by more than one corporate entity. In addition, a license as an

individual broker and a license as a broker-officer are separate entities and the status is not

transferable from one to the other.

Employees of real estate brokers—real estate salespersons—also have tougher licensing

requirements. An applicant for a real estate salesperson must complete at least one course prior

to licensure and two additional courses within 18 months of being licensed; the applicant must

also pass an examination.

California

Year Status

1996 Regulation in effect

Real Estate Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for an individual broker license;

• A natural person applying for a license as a broker-officer of a corporate entity.

A license as an individual broker and a license as a broker-officer are separate entities and the

status is not transferable from one to the other. The status as a broker-officer of one

corporation is not transferable to being a broker-officer of another corporation.

There are no provisions in the Business and Professions Code that authorize a limited liability

company to become licensed as a real estate broker.

Age

• Unknown

Residency

• An applicant who is not a resident of California is eligible for a real estate license provided

that the applicant qualifies for licensure under the statute and that the state or other

jurisdiction which is the place of residence of the applicant permits a resident of California

to qualify for and obtain a real estate license in that jurisdiction.

• A foreign corporation may only be eligible if, and for so long as, at least one of the officers

of the corporation who is designated and licensed as a real estate broker pursuant to

Section 10158 or 10211 is a resident of the state.

Experience

• An applicant for a real estate broker’s license must have held a real estate salesman’s

license for at least two years and qualified for renewal within the five-year period

immediately prior to the date of application for the broker’s license.

Education

• If the applicant does not have two years’ experience as a real estate salesperson but can

show the equivalent of two years’ general real estate experience or graduation from a four-

year college or university, which courses included specialization in real estate, the

applicant may be granted a license upon the commissioner’s approval and meeting the

other prerequisites.

• The applicant must fulfill the pre-licensing education requirement. The applicant must

complete a three-semester unit course, or the quarter equivalent thereof, in each of the

following: real estate practice; legal aspects of real estate; real estate appraisal; real estate

financing; and real estate economics or accounting; and three of any of the following

courses: advanced legal aspects of real estate; advanced real estate finance; advanced real

estate appraisal; business law; escrows; real estate principles; property management; real

estate office administration; or mortgage loan brokering and lending.

Examination

• The applicant must pass an examination.

Fitness

• The applicant, or the officers, directors, or persons owning more than 10 percent of the

stock of any corporation must demonstrate honesty and truthfulness.

Net Worth

• None

Bond

• None

Background Investigation

• Unknown

Continuing Education

•

The licensee is required to complete 45 hours of continuing education during a four-year

licensing period.

Page 23

Managing Principal

• A corporation may be licensed as a real estate broker through one or more of its officers

who are brokers or have qualified for a broker license by examination within the 12

months preceding receipt of application. All acts of the licensed broker/officer(s) under

this license must be performed only on behalf of the corporation.

Employee Exemptions

• Employees that are acting as real estate salespersons are required to be separately licensed.

• Every partner through whom a partnership acts must be a licensed real estate broker.

• When a real estate license is issued to a corporation, if it desires any of its officers, other

than the officer designated by it pursuant to Section 10211, to act under its license as a real

estate broker, it shall procure an additional license for each additional officer(s).

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Insurance companies

• Consumer loan companies

• Securities broker-dealers

Safe Harbor

• None

Branch Offices

In-state Requirement

• A licensee is required to maintain an office in the state.

License Requirement

• A licensee must obtain a separate license for each branch office.

Branch Manager

• No requirements.

Licensing Fees

Initial Application

• Exact fees unknown, but could have ranged from $165–$215. (Since current (2006)

licensing fees are $165, it was likely $165.)

Branch Application

• None

Renewal Application

• Exact fees unknown, but could have ranged from $165–$215. (Every four years. Since

current (2006) licensing fees are $165, it was likely $165.)

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for a license as a “Real Estate Salesperson.”

Age

• Unknown

Residency

• An applicant who is not a resident of California is eligible for a real estate license provided

that the applicant qualifies for licensure under the law and that the state or other

jurisdiction which is the place of residence of the applicant permits a resident of California

to qualify for and obtain a real estate license in that jurisdiction.

Education

• The applicant is required to fulfill a pre-licensing education requirement. That applicant

must show successful completion, at an accredited institution, of a three-semester unit

course, or the quarter equivalent thereof, in real estate principles.

• In addition, to obtain an original real estate salesperson license shall, prior to or within 18

months of issuance of the license, the licensee shall submit evidence of successful

completion, at an accredited institution, of two of the following courses: real estate

practice; legal aspects of real estate; real estate appraisal; real estate financing; real estate

economics or accounting; business law; escrows; property management; real estate office

administration; or mortgage loan brokering and lending.

Experience

• None

Examination

• The applicant must successfully complete an examination.

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• Unknown

Continuing Education

• A licensee who qualifies for a license based on pre-licensing/post-licensing education

required prior to or within 18 months of issuance of license shall not be required for the

first license renewal thereafter to complete the 45 hour continuing education requirement,

except for four courses: A three-hour course in ethics, professional conduct, and legal

aspects of real estate, which shall include, but not be limited to, relevant legislation,

regulations, articles, reports, studies, court decisions, treatises, and information of current

interest; a three-hour course in agency relationships and duties in a real estate brokerage

practice, including instruction in the disclosures to be made and the confidences to be kept

in the various agency relationships between licensees and the parties to real estate

transactions; a three-hour course in trust fund accounting and handling; and a three-hour

course in fair housing.

• Thereafter, the licensee must complete 45 hours of education.

License Fee

• Unknown, $120–$170 (More than likely it was $120 since current license fees are $120)

Page 24

Renewal Fee

• Unknown, $120–$170 (Every four years. More than likely it was $120 since current

renewal fees are $120.)

1997 No change

1998 No change

1999 No change

2000 No change

2001 No change

2002 No change

2003 Change

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for a license as a “Real Estate Salesperson.”

Education

• The applicant is required to fulfill a pre-licensing education requirement. The applicant

must show successful completion, at an accredited institution, of a three-semester unit

course, or the quarter equivalent thereof, in real estate principles.

• In addition, to obtain an original real estate salesperson license shall, prior to the issuance

of the license, or within 18 months after issuance, the applicant must submit evidence of

successful completion, at an accredited institution, of a course in real estate practices, and

one of the following courses: Legal aspects of real estate; real estate appraisal; real estate

financing; real estate economics or accounting; business law; escrows, property

management; real estate office administration; mortgage loan brokering and lending; or

computer applications in real estate.

2004 No change

2005 No change

2006 No change

Changes with unknown effective date

Real Estate Broker Applicant

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for an individual broker license;

• A natural person applying for a license as a broker-officer of a corporate entity.

A license as an individual broker and a license as a broker-officer are separate entities and the

status is not transferable from one to the other. The status as a broker-officer of one

corporation is not transferable to being a broker-officer of another corporation.

There are no provisions in the Business and Professions Code that authorize a limited liability

company to become licensed as a real estate broker.

Age

• The applicant must be 18 years of age.

Background Investigation

• Fingerprints are required.

Managing Principal

• The person applying for a designated broker-officer license must hold an officer title in the

corporation. Fingerprints are also required.

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for an individual salesperson license.

Age

• The applicant must be 18 years of age.

Background Investigation

• Fingerprints are required.

Page 25

Colorado

§12-61-900 et seq.

http://www.dora.state.co.us/real-estate/index.htm

Regulation effective since: January 1, 2007

Colorado

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Currently, Colorado licenses only mortgage brokers whose business is not limited to exclusively

placing mortgage loans with institutional investors. Therefore, most mortgage brokers are not

licensed in Colorado. However, Colorado legislators recently amended the law and effective

January 1, 2007, all individuals acting as mortgage brokers must register with the Division of

Real Estate. Colorado does not have the typical firm/employee regulatory policy; rather, all

individuals that broker a mortgage, offer to broker a mortgage, act as a mortgage broker, or offer

to act as a mortgage broker are required to register. Furthermore, “Mortgage broker” means an

individual who negotiates, originates, or offers or attempts to negotiate or originate for a

borrower, and for a commission or other thing of value, a loan to be consummated and funded by

a mortgage lender. The policy is fairly liberal in that it does not require an applicant to have

prior education, prior experience, or to demonstrate fitness. Each applicant is, however, required

to obtain a $25,000 bond, consent to a criminal background check, and pay a $200 fee.

Registrants will be required to renew every three years.

Colorado

Year Status

1996 * Rule 51-4.1 of the Division of Securities states “A mortgage broker-dealer whose business is limited exclusively to effecting

transactions with financial institutions [as defined in section 11-51-201(6), C.R.S.] is exempt from the licensing requirements of

section 11-51-401(1), C.R.S.” It is unclear when this rule was promulgated by the division.

1997 No change

1998 No change

1999 No change

2000 No change

2001 No change

2002 No change

2003 No change

2004 No change

2005 No change

2006 No change

2007 Change: Registration implemented for all individuals acting as mortgage brokers.

Mortgage Broker Applicant

Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• A natural person applying for an individual registration (every individual that meets the

definition of a mortgage broker must be registered and bonded as an individual mortgage

Page 26

broker).

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• The applicant must maintain a bond in the amount of $25,000.

Background Investigation

• The applicant must submit a set of fingerprints and consent to a criminal background check.

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Clerical employees are not required to register or obtain a license.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

Safe Harbor

• None

Branch Offices

In-state Requirement

• None

License Requirement

• None

Branch Manager

• None

Licensing Fees

Initial Application

• $200 License Fee

Branch Application

• None

Renewal Application

• $200 Renewal Fee (Triennially)

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• A natural person applying for an individual mortgage broker registration. (Only those

mortgage brokers who are registered or exempt from registration by law may broker a

mortgage, offer to broker a mortgage, act as a mortgage broker, or offer to act as a

mortgage broker.)

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• The applicant must obtain a bond in the amount of $25,000.

Background Investigation

• The applicant must submit a set of fingerprints.

Continuing Education

• None

License Fee

• $200

Renewal Fee

• $200 (Triennially)

Page 27

Connecticut

§36a-485 et seq.

http://www.ct.gov/dob/site/default.asp

Regulation effective since: January 1, 1990

Connecticut

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Connecticut has regulated mortgage brokers since 1990. The Consumer Credit Division of the

Department of Banking currently regulates approximately 1,264 First Mortgage Broker Only

(FMBO) licensees (this includes principal and branch offices) and also registers mortgage

originators that are employed by those licensees pursuant to Title 36a, Chapter 668 of the

Connecticut General Statutes.

Connecticut has a fairly strict policy, including an experience

requirement (three years in the industry within the preceding five years of the date of

application) for all persons appointed in a supervisory capacity in each licensed office. The

policy also requires that each licensee maintain a verifiable net worth of $25,000 and a $40,000

surety bond. In addition, licensees are required to register their mortgage originators and to

provide notification of all changes in originator employment to the division.

Connecticut

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant or the members if the applicant is a partnership or association, or the

officers, directors, and principal employees if the applicant is a corporation must

demonstrate financial responsibility, character, reputation, integrity, and general fitness.

Net Worth

• None

Bond

• An applicant must maintain a bond in the amount of $40,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

http://www.ct.gov/dob/cwp/view.asp?a=2233&q=297864&dobNAV_GID=1663

Page 28

Employee Exemptions

• Employees are not required to obtain a license or to register.

Licensing Exemptions

Entities

• Regulated financial institutions

• Insurance companies

Safe Harbor

• Only persons granting five or fewer first mortgage loans within any period of 12

consecutive months are exempt from licensing.

Branch Offices

In-state Requirement

• None

License Requirement

• A licensee must obtain a separate license for each branch office.

Branch Manager

• None

Licensing Fees

Initial Application

• $200 License Fee

Branch Application

• $200 Branch License Fee

Renewal Application

• $200 Renewal Fee (Annually)

• $200 Branch Renewal Fee (Annually)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 No change

2000 No change

2001 No change

2002 Change

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Experience

• The licensee is required to have, at the location for which the license is sought, a person

with supervisory authority over the brokerage activities who has at least three years’

experience in the mortgage lending or mortgage brokerage business within the five years

immediately preceding the application for the license. This person is not required to be

(but may be) an officer, director, or manager. If this person is not an officer, member or

partner of an LLC, or a sole proprietor and is originating loans, than she or he must also

be registered as a loan officer.

Net Worth

• The applicant is required to maintain a net worth of $25,000.

Managing Principal

• Each licensee is required to have a person with supervisory authority over the brokerage

activities who has at least three years’ experience in the mortgage lending or mortgage

brokerage business within the five years immediately preceding the application for the

license. This person is not required to be (but may be) an officer, director, or manager. If

this person is not an officer, member of an LLC, partner or sole proprietor and is

originating loans, than she or he must also be registered as a loan officer.

Employee Exemptions

• Clerical employees are not required to obtain a license or to register.

• Loan originators may only be registered with one licensee at a time and must be working

out of the licensed location.

• Originators do not include an officer, if the licensee is a corporation; a general partner, if

the licensee is a partnership; a member, if the licensee is a limited liability company; or a

sole proprietor, if the licensee is a sole proprietorship. Officers of the company, members

Page 29

of an LLC, partners of a partnership, and sole proprietors do not need to register as loan

originators.

Branch Offices

Branch Manager

• The licensee is required to have, at the location for which the license is sought, a person

with supervisory authority over the brokerage activities who has at least three years’

experience in the mortgage lending or mortgage brokerage business within the five years

immediately preceding the application for the license.

Licensing Fees

Initial Application

• $400/$200 License Fee (Each applicant for a first mortgage broker license shall, at the

time of making such application, pay to the commissioner a license fee of $400, provided

if such application is filed not earlier than one year before the date such license will

expire, the applicant shall pay to the commissioner a license fee of $200.)

Branch Application

• $400/$200 License Fee (Each applicant for a first mortgage broker license shall, at the

time of making such application, pay to the commissioner a license fee of $400, provided

if such application is filed not earlier than one year before the date such license will

expire, the applicant shall pay to the commissioner a license fee of $200.)

Renewal Application

• $400/$200 Renewal Fee (Biennially—each applicant for a first mortgage broker license

shall, at the time of making such application, pay to the commissioner a license fee of

$400, provided if such application is filed not earlier than one year before the date such

license will expire, the applicant shall pay to the commissioner a license fee of $200.)

• $200 Branch Renewal Fee (Biennially—each applicant for a first mortgage broker license

shall, at the time of making such application, pay to the commissioner a license fee of

$400, provided if such application is filed not earlier than one year before the date such

license will expire, the applicant shall pay to the commissioner a license fee of $200.)

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• A natural person applying for a license as an “Originator.”

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• The applicant must demonstrate general fitness.

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• $100/$50 Registration Fee (A licensee filing an application for registration of an

originator shall, at the time of making such application, pay to the commissioner a

registration fee of $100 for such originator, provided if such application is filed not earlier

than one year before the date the license of the applicant will expire, the applicant shall

pay to the commissioner a registration fee of $50 for such originator.)

Renewal Fee

• $100/$50 Renewal Fee (Biennially—A licensee filing an application for registration of an

originator shall, at the time of making such application, pay to the commissioner a

registration fee of $100 for such originator, provided if such application is filed not earlier

than one year before the date the license of the applicant will expire, the applicant shall

pay to the commissioner a registration fee of $50 for such originator.)

2003 No change

2004 No change

2005 No change

2006 No change

Page 30

Delaware

5 Del. Code §§2101 et seq.

http://www.state.de.us/bank/

Regulation effective since: July 7, 1992

Delaware

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The State of Delaware has licensed mortgage brokers since 1992 and has not made any

substantive changes to its law since it was enacted. The Office of the State Banking

Commissioner currently licenses approximately 447 principal and branch offices of mortgage

brokers pursuant to the Mortgage Loan Brokers Act.

The Mortgage Loan Brokers Act imposes

few requirements on applicants; an applicant must only obtain a bond in the amount of $25,000,

demonstrate general fitness, and consent to a background investigation. A licensee must obtain a

license for each branch office, but is not required to maintain an office within the state.

Employees of licensees are not required to obtain a license or to register at this time.

Delaware

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate financial responsibility, experience, character, and general

fitness.

Net Worth

• None

Bond

• The applicant must maintain a bond in the amount of $25,000.

Background Investigation

• None

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Employees of licensees are not required to obtain a license or to register.

http://www.state.de.us/bank/information/nondepsearch.shtml

Page 31

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

Safe Harbor

• A person who acts as a mortgage loan broker with respect to five or fewer mortgage loans

within any 12-month period is not deemed to be transacting the business of a mortgage loan

broker.

Branch Offices

In-state Requirement

• A licensee is not required to maintain an office in the state.

License Requirement

• A licensee is required to obtain a license for each office or other place of business from

which its mortgage loan brokerage business is conducted.

Branch Manager

• None

Licensing Fees

Initial Application

• $250 License Fee

• $250 Application Fee

Branch Application

• $250 Branch License Fee

• $250 Branch Application Fee

Renewal Application

• $250 Renewal Fee (Annually)

• $250 Branch Renewal Fee (Annually)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 No change

2000 No change

2001 No change

2002 No change

2003 No change

2004 No change

2005 No change

2006 No change

Changes with unknown effective date

Mortgage Broker Applicant

Requirements

Fitness

• In addition to the fitness requirement, the department requires a minimum of three letters of

reference from businesses currently doing business with the applicant company. These can

be the CPA, attorney, bank, or other type of business. (One letter must be from a bank.)

Each letter must refer to the applicant company, not an individual within the company.

Net Worth

• The applicant or the members, officers, or principals must submit a personal financial

statement; the applicant must also submit a business balance sheet.

Background Investigation

• Background checks are conducted.

Page 32

District of Columbia

§26-1101 et seq.

http://disb.dc.gov/

Regulation effective since: September 9, 1996

District of Columbia

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The District of Columbia Office of Banking and Financial Institutions administers the Mortgage

Lender and Broker Act. Since its enactment, few substantive changes have been made to the

Mortgage Lender and Broker Act. The only major change has been the repeal of the safe harbor

clause. The District of Columbia has steep licensing, application, and renewal fees. Currently,

an applicant for a mortgage broker license must pay $600 in application fees and a $500 license

fee for each office. At the time of examination, the mortgage broker must pay a $400 fee and

$6.60 per loan brokered during the previous year. In addition to the annual examination and per-

loan fees, a mortgage broker must pay an annual renewal fee of $900.

District of Columbia

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A natural person applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• If the applicant is not a resident of the District of Columbia, the applicant must maintain a

resident registered agent.

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate good moral character, sufficient financial responsibility,

business experience, and general fitness.

Net Worth

• The applicant must provide a statement from a depository institution verifying that the

applicant has at least $10,000 on deposit or in an established line of credit for operation of

the business, or some combination of both.

Bond

• The applicant must maintain a bond for each licensed office in an amount that depends on

the total dollar amount of stated loans during the three calendar years preceding the date of

application:

Where the total dollar amount of stated loans was $1,000,000 or less, the bond shall

be in the amount of $12,500.

Page 33

Where the total dollar amount of stated loans was more than $1,000,000 but not more

than $2,000,000, the bond shall be in the amount of $17,500.

Where the total dollar amount of stated loans was more than $2,000,000 but not more

than $3,000,000, the bond shall be in the amount of $25,000.

Where the total dollar amount of stated loans was more than $3,000,000, the bond

shall be in the amount of $50,000.

Subject to approval by the superintendent, if an applicant files four or more original or

renewal applications at the same time, the applicant may provide a blanket surety

bond for all licensed offices in the amount of $200,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Employees of licensees are not required to obtain a license or to register.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

Safe Harbor

• A mortgage broker brokering three or fewer loans does not need to obtain a license.

Branch Offices

In-state Requirement

• A licensee is not required to maintain an office in the District; however, the licensee may

not receive any application for a loan or allow any note or contract for a loan or mortgage,

evidence of any note or contract for a loan or mortgage, or evidence of indebtedness to be

signed or executed at any location for which the mortgage broker does not have a license,

except at the office of the attorney for the borrower or for the broker or at the office of a

title insurance company, a title company, or an attorney for a title insurance company or a

title company.

License Requirement

• A licensee is required to obtain a separate license for each branch office. A licensee must

also obtain a bond for each office (see bonding requirements above).

Branch Manager

• None

Licensing Fees

Initial Application

• $100 Investigation Fee

• $500 Application Fee

• $500 License Fee

Branch Application

• $100 Investigation Fee

• $500 Application Fee

• $500 License Fee

Renewal Application

• Every licensee is required to pay an annual renewal fee calculated in accordance with a

schedule set by regulation promulgated by the superintendent. All such fees shall be

assessed on or before April 25, for that calendar year, and on or before April 25 for every

calendar year thereafter.

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 No change

2000 No change

Page 34

2001 Change

Mortgage Broker Applicant

Requirements

Licensing Fees

Renewal Application

• $900 Renewal Fee (Annually)

• $900 Branch Renewal Fee (Annually)

2002 Change

Mortgage Broker Applicant

Requirements

Licensing Exemptions

Safe Harbor

• None

2003 No change

2004 No change

2005 No change

2006 No change

Changes with unknown effective date

Mortgage Broker Applicant

Requirements

Net Worth

• The applicant must provide a financial statement of the business and a personal financial

report for each president, senior vice president, secretary, treasurer, and directors, as well as

any other person(s) owning or controlling 10 percent or more of the equity ownership of the

organization.

Background Investigation

• The applicant and any president, senior vice president, secretary, treasurer, directors, and

other persons owning or controlling 10 percent or more of the equity ownership of the

organization must complete a Release of Personal Information Form; the applicant must

also provide a company credit report.

Florida

§26-1101 et seq.

http://www.flofr.com/licensing/

Regulation effective since: September 9, 1996

Florida

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The State of Florida has licensed mortgage brokers since 1991. The Securities and Finance

Division of the Department of Financial Services regulates both firms and employees pursuant to

Page 35

Chapter 494 of the Florida Statutes. The division currently has approximately 9,879 mortgage

broker business licensees and 68,564 mortgage broker individual licensees.

In comparison to most states, Florida has had a restrictive licensing policy in effect over the past

decade. Although Florida law has no financial credibility requirements, it does have relatively

strict licensing requirements for both firms and individuals. Florida law requires that all entities

seeking a “Mortgage Broker Business” license designate a qualified principal broker who has

been licensed as a “Mortgage Broker Individual” for at least one year or who can demonstrate

being actively engaged in a mortgage-related business for at least one year. Mortgage broker

business licensees must maintain a physical presence in the state and may only conduct

brokering activities through licensed mortgage broker individuals. Mortgage broker individuals

(also known as associates) must be at least 18 years of age, must complete 24 hours of pre-

licensing education, and must pass an examination. Both qualified principal brokers and

mortgage broker individuals must complete 14 hours of continuing education annually.

Florida

Year Status

1996 Regulation in effect

Mortgage Broker Business

Applicant Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• The department may require that each officer, director, and ultimate equitable owner of a

10 percent or greater interest in the applicant submit a complete set of fingerprints taken by

an authorized law enforcement officer.

Continuing Education

• None

Managing Principal

• Each applicant must designate a qualified principal broker. A qualified principal broker

must be a licensed mortgage broker individual (see employee requirements below).

Employee Exemptions

• Clerical employees are not required to obtain a license. However, any individual acting as

an associate for a licensee must obtain a mortgage broker individual license.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Insurance companies

• Securities broker-dealers

Safe Harbor

• None

Branch Offices

In-state Requirement

• A licensee is required to maintain an office in the state.

License Requirement

• A licensee must obtain a permit for each branch office.

Branch Manager

• A licensee must designate a branch manager that is licensed as a mortgage broker

individual (see employee requirements below).

Licensing Fees

Initial Application

• $350 Application Fee (Special assessments are also collected.)

http://www.flofr.com/licensing/download.htm

Page 36

Branch Application

• Branch application fee may not exceed $150.

Renewal Application

• Renewal fee may not exceed $300. (Biennially)

• Branch renewal fee may not exceed $150. (Biennially)

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual seeking a “Mortgage Broker Individual” license.

Age

• The applicant must be 18 years of age.

Residency

• None

Education

• The applicant must have completed 24 hours of classroom education on primary and

subordinate financing transactions and the laws and rules of ss. 494.001–494.0077.

Experience

• None

Examination

• The applicant must pass a written test adopted by the department that is designed to

determine competency in primary and subordinate mortgage financing transactions as well

as to test knowledge of ss. 494.001–494.0077 and the rules adopted pursuant thereto.

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• The applicant must provide a set of fingerprints and consent to a background check.

Continuing Education

• None

License Fee

• License fee is not to exceed $200.

Renewal Fee

• Renewal fee is not to exceed $150. (Biennially)

1997 No change

1998 No change

1999 Change

Mortgage Broker Business

Applicant Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Branch Offices

License Requirement

• A branch office license is required for each branch office maintained by a licensee.

Licensing Fees

Initial Application

• $425 Application Fee

Branch Application

• $225 Application Fee

Renewal Application

• $375 Renewal Fee (Biennially)

• $225 Branch Renewal Fee (Biennially)

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual seeking a “Mortgage Broker Individual” license.

License Fee

• $200 Application Fee

Renewal Fee

• $150 Renewal Fee (Biennially)

2000 No Change

2001 Change

Mortgage Broker Business

Applicant Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Managing Principal

• Each applicant must designate a qualified principal broker. A qualified principal broker

must be a licensed associate. In addition, the designated principal broker must have been a

licensed mortgage broker individual in Florida for at least one year prior to being

designated as a principal broker, or shall demonstrate to the satisfaction of the department

that such principal broker has been actively engaged in a mortgage-related business for at

least one year prior to being designated as a principal broker. The qualified principal

broker must complete 14 hours of continuing education.

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual seeking a “Mortgage Broker Individual” license.

Continuing Education

• Each licensee must complete 14 hours of continuing education.

2002 No change

Page 37

2003 No change

2004 No change

2005 No change

2006 No change

Georgia

§7-1-1000 et seq.

http://www.ganet.org/dbf/mortgage_forms.html

Regulation effective since: July 1, 1993

Georgia

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Enacted in 1993, the Residential Mortgage Act requires that mortgage brokers obtain a license

prior to engaging in brokering activities in Georgia. Today, the Georgia Department of Banking

and Finance administers the Residential Mortgage Act and licenses approximately 5,164

mortgage brokers (this includes 3,524 branch licenses, 56 restricted licensees, and 1,584 primary

licenses).

Each applicant for a license must obtain a bond in the amount of $50,000 and must have a person

in charge of its business who meets either the education or experience requirement. All branch

managers must also be approved by the department. Both the person in charge and branch

managers must complete 12 hours of continuing education annually.

Although the Georgia Residential Mortgage Act does not have any licensing or registration

requirements for employees of licensees, it does require that applicants and licensees complete

background checks on all covered employees. (Covered employees include those employees who

physically work in the state of Georgia and who may enter, delete, or verify any information on

any mortgage loan application form or document.)

In addition, any person who acts as the collecting agent at a closing of a mortgage loan

transaction subject to the Georgia Residential Mortgage Act is liable for payment of the $6.50

fee to the department. Brokers are only required to collect the $6.50 fee if they are the person

who closes the mortgage loan (a mortgage loan is deemed to have been closed by a person if

https://dbfweb.dbf.state.ga.us/WebMBData.html

Page 38

such person is indicated as the secured party on the security deed or any other loan document

that establishes a lien on the residential real estate taken as collateral for the mortgage loan).

Georgia

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant and its officers, directors, and principals must demonstrate good character

and ethical reputation; the applicant must demonstrate reasonable financial responsibility;

the applicant must have reasonable policies and procedures to receive and process customer

grievances and inquiries promptly and fairly; and the applicant must have and maintain an

agent for service in the state.

Net Worth/Bond

• The applicant must have $25,000 in verifiable tangible net worth OR the applicant must

obtain a $50,000 surety bond. The applicant must also submit financial statements.

Background Investigation

• The department is authorized to obtain conviction data with respect to any applicant or any

person who is a director, officer, partner, agent, employee, or ultimate equitable owner of

10 percent or more of the applicant. For such purpose, the department may submit to the

Georgia Crime Information Center two complete sets of fingerprints of the applicant or any

person who is a director, officer, partner, agent, employee, or ultimate equitable owner of

10 percent or more of the applicant, the required records search fees, and such other

information as may be required.

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Employees are not required to obtain a license or to register.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

Safe Harbor

• Limited. Any natural person who makes five or fewer mortgage loans in any one calendar

year is exempt. A person other than a natural person who makes five or fewer mortgage

loans in any one calendar year shall not be exempt from the licensing requirements unless

such person applies for and is granted an exemption by the department in accordance with

regulations promulgated by the department.

Branch Offices

In-state Requirement

• Statute is unclear.

License Requirement

• A licensee must obtain the department’s approval to open a branch office.

Branch Manager

• None

Licensing Fees

Initial Application

• Unknown

Branch Application

• No fee is required for the first branch office if registered initially with the broker

application. Subsequent applications must be accompanied by a $350 fee.

Renewal Application

• Unknown

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Page 39

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 Change

Mortgage Broker Applicant

Requirements

Branch Offices

In-state Requirement

• If the applicant for a mortgage broker license or a renewal of such license does not have a

physical place of business in Georgia, a license or renewal may only be issued if the

applicant’s home state does not require that in order to be licensed a mortgage broker must

have a physical place of business in such home state.

1999 No Change

2000 Change

Mortgage Broker Applicant

Requirements

Experience/Education

• The applicant or the individual in charge of the applicant’s operations must have two years

of verifiable experience working full-time for a licensed mortgage broker or lender (if the

applicant’s experience is received from an employer not required to be a Georgia

Residential Mortgage Act licensee, such applicant must also complete four hours of

education provided by an approved school in Georgia, which education specifically covers

the Georgia Residential Mortgage Act and rules and regulations of the department) OR the

applicant or the individual in charge of the applicant’s operations must complete a

minimum of 40 course hours of prescribed courses from a department-approved provider of

mortgage training courses.

Managing Principal

• The applicant or the person designated responsible is the managing principal. This

individual is required to fulfill either the experience or education requirement listed above.

Branch Offices

Branch Manager

• All branch managers in Georgia must be approved by the department. A licensee may place

a new branch manager subject to the department’s approval but must file for approval

within 15 days of the placement and must remove the person immediately should the

department deny approval. According to Ga. Comp. R. & Regs. r. § 80-11-1-.04(2), “In

determining whether a branch manager may supervise more than one location, the

department should consider the proximity of branches to each other, business volume of

each, the experience level of the proposed manager and plans to handle the supervision.”

The department is authorized to do a background check, obtain a credit report, and require a

financial statement and such other pertinent information as it may require to satisfy itself

that the location will be operated by the branch manager responsibly and in compliance

with the laws and rules of Georgia.

2001 No change

2002 Change

Employee Requirements

Background Investigation

• Applicants and licensees must complete background checks on all covered employees.

Covered employees include those employees who physically work in the state of Georgia

and who may enter, delete or verify any information on any mortgage loan application form

or document. Employees of a licensee or applicant who are not involved in the mortgage

loan business are not covered employees.

2003 Change

Mortgage Broker Applicant

Requirements

Net Worth/Bond

• The applicant must have $100,000 in verifiable tangible net worth OR the applicant must

obtain a $50,000 surety bond.

Page 40

• The applicant must also submit financial statements.

2004 Change

Mortgage Broker Applicant

Requirements

Net Worth

• None

Bond

• The applicant must maintain a $50,000 bond.

2005 No change

2006 Change

Mortgage Broker Applicant

Requirements

Continuing Education

• The licensee or the person designated and employed as the manager of the licensee’s

business must earn 12 hours of credit by March 31, 2007 to qualify for renewal by the April

1, 2007 renewal deadline.

Managing Principal

• The licensee or the person designated and employed as the manager of the licensee’s

business must earn 12 hours of credit by March 31, 2007 to qualify for renewal by the April

1, 2007 renewal deadline.

Licensing Fees

Initial Application

• $250 Application Fee

• $500 License Fee

Branch Application

• The annual and renewal application and license fee for a licensee shall be $500, which

covers the main office and one additional branch office. Subsequent applications must be

accompanied by a $350 fee.

Renewal Application

• $500 Renewal Fee (The annual and renewal application and license fee for mortgage

brokers shall be $500, which covers the main office and one additional branch office.)

• It is unclear what additional branch renewal fees are.

Branch Offices

Branch Manager

• A person designated and employed as the manager of the licensee’s business must earn 12

hours of credit by March 31, 2007 to qualify for renewal by the April 1, 2007 renewal

deadline.

Changes with unknown effective dates

Mortgage Broker Applicant

Requirements

Background Investigation

• Financial and Biographical Reports are required for each director, senior officer, partner,

ultimate equitable owner of 10 percent or more of the applicant, or any individual who

directs the affairs or establishes policy for the licensee or for the applicant. (For this

purpose senior officer should include any person occupying the positions of chief executive

and/or operating officer and president and any other employee, regardless of title, who is

authorized to establish policy for the applicant regarding its mortgage brokering or

processing activities.)

• A current credit report and fingerprint cards are required for each natural person, director,

partner, ultimate equitable owner of 10 percent or more of the applicant, or any individual

who directs the affairs or establishes policy for the licensee.

Page 41

Hawaii

§454-1 et seq.

http://www.hawaii.gov/dcca/areas/pvl/programs/mortgage/

Regulation effective since: January 2, 1968

Hawaii

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Hawaii has licensed mortgage brokers and mortgage solicitors since 1968. Hawaii has two

licensing schemes both administered by different divisions of the Department of Commerce and

Consumer Affairs. The Mortgage Brokers and Solicitors Act regulates in-state mortgage brokers

and the Mortgage Loans Act regulates foreign lenders (out-of-state lenders). Foreign lenders are

eligible for an exemption from licensing pursuant to the Mortgage Loans Act only if the lender

does not establish a physical or legal presence in Hawaii and conducts all of its Hawaii lending

from offices outside of Hawaii or by using licensed Hawaii mortgage brokers. Foreign lenders

exempt from the Mortgage Loans Act are also exempt from the Mortgage Brokers and Solicitors

Act, which is administered by the Professional and Vocational Licensing Division (PVL). The

PVL licenses approximately 581 mortgage brokers, 140 branch offices, and 6,071 mortgage

solicitors.

Pursuant to the Mortgage Brokers and Solicitors Act, an applicant for a mortgage broker license

must designate a licensed “Designated Principal Mortgage Solicitor” that has at least two years

of mortgage lending experience; must maintain an in-state office; and must maintain a $15,000

bond. Branch offices must be licensed separately and be operated by a licensed mortgage

solicitor with at least two years’ experience. Mortgage solicitor licensees are required to be at

least 18 years of age.

Hawaii

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

http://www.hawaii.gov/dcca/areas/pvl/main/reports/pvl_geo_report.pdf

Page 42

Age

• The applicant must be 18 years of age. (Does not state who this requirement would apply

to for a business entity.)

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate experience, integrity, and competency in financial

transactions involving primary or subordinate mortgage financing.

Net Worth

• None

Bond

• The applicant must maintain a bond in the amount of $15,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• The applicant must designate a “Designated Principal Mortgage Solicitor.” The designee

must be licensed as a mortgage solicitor.

Employee Exemptions

• Mortgage solicitors are required to obtain a license.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

• Consumer loan companies

Safe Harbor

• None

Branch Offices

In-state Requirement

• A licensee must maintain an in-state office.

License Requirement

• A licensee must obtain a license for each branch office.

Branch Manager

• Each licensee must designate a licensed mortgage solicitor to be in charge of each branch

office.

Licensing Fees

Initial Application

• $100 Application Fee

Branch Application

• $2 Application Fee

Renewal Application

• $100 Renewal Fee (Annually)

• Branch renewal fee unclear.

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for a license as a “Mortgage Solicitor.”

Age

• The applicant must be 18 years of age.

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• Unknown

Continuing Education

• None

License Fee

• $25 License Fee

Renewal Fee

• $25 Renewal Fee (Annually)

1997 No change

1998 No change

1999 No change

2000 No change

2001 Change

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Experience

• The applicant’s designated principal mortgage solicitor must have two years of experience

in financial transactions involving primary or subordinate mortgage financing, or

equivalent experience as determined by the commissioner.

Page 43

Fitness

• The applicant must demonstrate experience, financial integrity, and competency in

financial transactions involving primary or subordinate mortgage financing.

Net Worth

• The applicant must submit financial statements.

Managing Principal

• The applicant must appoint a “Designated Principal Mortgage Solicitor.” The designee

must be licensed as a mortgage solicitor. The designee must also have two years of

experience in financial transactions involving primary or subordinate mortgage financing,

or equivalent experience as determined by the commissioner.

Licensing Fees

Initial Application

• Unknown

Branch Application

• Unknown

Renewal Application

• Unknown (Biennially)

Branch Offices

Branch Manager

• Each licensee must designate a licensed mortgage solicitor to be in charge of the branch

office. The designee must also have two years of experience in financial transactions

involving primary or subordinate mortgage financing, or equivalent experience as

determined by the commissioner.

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for a mortgage solicitor license.

License Fee

• Unknown

Renewal Fee

• Unknown (Biennially)

2002 No change

2003 No change

2004 No change

2005 No change

2006 No change

Changes with unknown effective date

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Managing Principal

• The applicant must appoint a “Designated Principal Mortgage Solicitor.” The designee

must be licensed as a mortgage solicitor. The designee must also have two years of

experience in financial transactions involving primary or subordinate mortgage financing,

or equivalent experience as determined by the commissioner.

• The designated principal mortgage solicitor must apply for the special designation (it is

unclear if this actually constitutes a license).

Licensing Fees

Initial Application

• If applying in an odd-number year, a mortgage broker applicant must pay a $100 license

fee, a $70 CRF, a $100 1/2 renewal fee, and a $50 investigation fee (total $320).

• If applying in even-number year, a mortgage broker applicant must pay a $100 license fee,

a $35 CRF, and a $50 investigation fee (total $185).

• An individual applying for designation as a designated principal mortgage solicitor must

pay $195 if applying during an odd-number year and $110 if applying during an even-

number year.

Branch Application

• If applying during an odd-number year, a mortgage broker applicant must pay a $50

license fee, a $70 CRF, a $50 1/2 renewal fee, and a $25 investigation fee (total $195).

• If applying during an even-number year, the applicant must pay a $50 license fee, a $35

CRF, and a $25 investigation fee (total $110).

Renewal Application

• $200 Renewal Fee (Biennially)

• $100 Branch Renewal Fee (Biennially)

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for a license as a “Mortgage Solicitor.”

License Fee

• If applying in an odd-number year, $25 application fee, $25 license fee, $70 CRF, $25 1/2

renewal fee (total $145)

• If applying in an even-number year, $25 application fee, $25 license fee, $35 CRF (total

$85)

Renewal Fee

• $50 Renewal Fee (Biennially)

Page 44

Idaho

§26-3101 et seq.

http://finance.idaho.gov/MortgageForm.aspx

Regulation effective since: July 1, 1996

Idaho

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Idaho’s Department of Finance has licensed mortgage brokers since July of 1996, and currently

licenses approximately 930 mortgage brokers pursuant to the Residential Mortgage Practices

Act.

Mortgage brokers applying for a license in Idaho must designate a “Qualified Person in

Charge” (QPIC) for each office within the state. The QPIC must have three years of experience

in residential mortgage lending and must obtain a loan originator license if originating loans (a

sole proprietor designated as the QPIC is not required to obtain a loan originator license if the

sole proprietor does not originate loans for anyone but himself). Mortgage brokers have no net

worth requirements, but are required to obtain a $25,000 bond for the principal office and a

$10,000 bond for each additional office.

Idaho began licensing loan originators employed by mortgage brokers in January of 2006. There

are few requirements for applicants seeking an originator license, but unlike most states, loan

originators in Idaho must obtain a $10,000 bond. Loan originators and QPICs are responsible for

completing 16 hours of continuing education during the licensing period.

* Idaho is one of several states that have adopted the national uniform mortgage licensing forms.

Idaho

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• The applicant or each of the individuals in charge of the applicant’s places of business in

http://finance.idaho.gov/MortgageLicense.aspx

Page 45

the state must each have a minimum of three years’ experience in residential mortgage

lending.

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate responsibility, character, and fitness.

Net Worth

• The applicant must maintain $10,000 in net worth.

Bond

• The applicant must maintain a $10,000 bond and a $5,000 bond for each additional office.

Background Investigation

• None

Continuing Education

• None

Managing Principal

• None; however, the applicant OR each of the individuals in charge of the applicant’s

places of business in the state must each have a minimum of three years’ experience in

residential mortgage lending.

Employee Exemptions

• Employees are not required to be licensed.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

Safe Harbor

• None

Branch Offices

In-state Requirement

• A licensee is not required to maintain an office in the state.

License Requirement

• A licensee must obtain a separate license for each place of business.

Branch Manager

• None; however, the applicant OR each of the individuals in charge of the applicant’s

places of business in the state must each have a minimum of three years’ experience in

residential mortgage lending.

Licensing Fees

Initial Application

• $200 Application Fee

Branch Application

• $200 Application Fee

Renewal Application

• $100 Renewal Fee (Annually)

• $100 Branch Renewal Fee (Annually)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 Change

Mortgage Broker Applicant

Requirements

Experience

• None

Managing Principal

• Each applicant must designate a “Qualified Person in Charge” (QPIC). This person does

not have to be an owner, officer, member, partner, or director. The QPIC must have a

minimum of three years’ experience in residential mortgage lending.

Licensing Exemptions

Safe Harbor

• Limited. Any person or entity not making more than five loans primarily for personal,

family, or household use and primarily secured by a security interest on residential real

property, with his own funds for his own investment, in any period of 12 consecutive

months is exempt.

Branch Offices

Branch Manager

• Each of the individuals in charge of the applicant’s places of business in the state must

Page 46

each have a minimum of three years’ experience in residential mortgage lending.

1998 No change

1999 No change

2000 No change

2001 No change

2002 No change

2003 Change

Mortgage Broker Applicant

Requirements

Bond

• The applicant must obtain a $10,000 bond and a $10,000 bond for each additional office.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

2004

Change

Mortgage Broker Applicant

Requirements

Net Worth

• None

Bond

• The applicant must obtain a $25,000 bond and a $10,000 bond for each additional office.

Licensing Fees

Initial Application

• $350 Application Fee

Branch Application

• $350 Application Fee

Renewal Application

• $150 Renewal Fee (Annually)

• $150 Branch Renewal Fee (Annually)

2005 No change

2006 Change (Because of the many amendments made since 1996, this is a complete compilation of the current statute.)

Mortgage Broker Applicant

Requirements

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate responsibility, character, and fitness.

Net Worth

• None

Bond

• The applicant must obtain a $25,000 bond and a $10,000 bond for each additional office.

Background Investigation

• The State conducts background checks on control persons (no fingerprints are required in

Idaho).

Continuing Education

• None

Managing Principal

• Each applicant must designate a “Qualified Person in Charge” (QPIC). This person does

not have to be an owner, officer, member, partner, or director.

• The QPIC must have a minimum of three years’ experience in residential mortgage

lending.

• The QPIC must obtain a loan originator license if conducting loan origination activities.

• Only sole proprietors who hold a mortgage broker-lender license in their own name will

not be required to obtain an additional loan originator license as long as they remain

exclusive to themselves and do not originate for any other entity.

• Regardless of whether the QPIC is conducting origination activities, the QPIC must

complete 16 hours of continuing education annually.

Employee Exemptions

• Clerical employees are not required to be licensed.

• Loan originators must obtain a license. Loan originators may not be simultaneously

employed by more than one licensed mortgage broker or mortgage lender or enter into

concurrent contractual relationships for delivery of loan origination services to more than

one licensee.

Licensing Exemptions

Entities

• Regulated financial institutions

Page 47

• Lawyers

Safe Harbor

• Limited. Any person or entity not making more than five loans primarily for personal,

family, or household use and primarily secured by a security interest on residential real

property, with his own funds for his own investment, in any period of 12 consecutive

months is exempt.

Branch Offices

In-state Requirement

• An applicant is not required to maintain an office in the state.

License Requirement

• An applicant must obtain a separate license for each place of business.

Branch Manager

• Each applicant must designate a “Qualified Person in Charge” (QPIC). This person does

not have to be an owner, officer, member, partner, or director.

• The QPIC must have a minimum of three years’ experience in residential mortgage

lending.

• The QPIC must obtain a loan originator license if conducting loan origination activities.

• Regardless of whether the QPIC is conducting origination activities, the QPIC must

complete 16 hours of continuing education annually.

Licensing Fees

Initial Application

• $350 Application Fee

Branch Application

• $350 Application Fee

Renewal Application

• $150 Renewal Fee (Annually)

• $150 Branch Renewal Fee (Annually)

Employee Requirements

The term “applicant,” “registrant,” or “licensee” refers to the following, unless otherwise

noted:

• An individual applying for a license as a “Loan Originator.”

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• The applicant must demonstrate financial responsibility, character, and fitness.

Net Worth

• None

Bond

• The applicant must obtain a bond in the amount of $10,000.

Background Investigation

• No fingerprints are required, but background checks are conducted.

Continuing Education

• The licensee must complete 16 hours of continuing education annually.

License Fee

• $100 License Fee (This is a one-time reduced fee for initial licensing compliance, e.g.,

applications submitted before March 1, 2006.)

• $200 License Fee (All applications submitted after March 1, 2006 must pay this amount.)

Renewal Fee

• $100 Renewal Fee (Annually)

Page 48

Illinois

205 ILCS 635/1 et seq.

http://www.obre.state.il.us/RESFIN/mortbank.htm

Regulation effective since: January 1, 1988

Illinois

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The Division of Banking of the Illinois Department of Financial and Professional Regulation is

responsible for administering the Residential Mortgage License Act of 1987 and currently

licenses approximately 1,556 mortgage bankers and brokers.

Illinois’ education and experience requirement is stricter than most states; it mandates that all

owners and managing executives have at least three years of residential mortgage lending

experience or complete the required education before seeking licensure. Pursuant to the

Residential Mortgage License Act, licensees may only broker loans to other licensees or entities

that are exempt from the Illinois licensing requirement.

Illinois has required registration of loan originators since 2004. To qualify for registration, a

loan originator must pass an examination and to maintain a license, a loan originator must

complete six hours of continuing education annually.

Illinois

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• The applicant or its members, directors, or principals as may be appropriate, must be at

least 18 years of age.

Residency

• None

Experience/Education

• The applicant or the members thereof if the applicant is a partnership or association, the

members or managers thereof that retain any authority or responsibility under the operating

agreement if the applicant is a limited liability company, or the officers and directors

thereof if the applicant is a corporation must have three years experience immediately

preceding application in real estate finance OR must have satisfactorily completed a

http://www.obre.state.il.us/MBLookup/MBList.htm

Page 49

program of education in real estate finance, as approved by the commissioner, within nine

months of receiving the initial license.

Examination

• None

Fitness

• The applicant and of the members thereof if the license applicant is a partnership or

association, of the officers and directors thereof if the license applicant is a corporation,

and of the managers and members that retain any authority or responsibility under the

operating agreement if the license applicant is a limited liability company must

demonstrate financial responsibility, experience, character, and general fitness.

Net Worth

• The applicant must maintain $35,000 in net worth.

Bond

• The applicant must maintain a bond in the amount of $20,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Any person employed by the licensee to assist in the performance of regulated activities

who is compensated in any manner by only that licensee is exempt from licensure.

Licensing Exemptions

Entities

• Regulated financial institutions

• Real estate agents

• Insurance companies

Safe Harbor

• None

Branch Offices

In-state Requirement

• A licensee is required to maintain an office in the state.

License Requirement

• A licensee is required to obtain a license for each branch office.

Branch Manager

• None

Licensing Fees

Initial Application

• $1,000 Application Fee

• $800 License Fee

Branch Application

• Unknown

Renewal Application

• $2,600 (Biennially—$800 shall be paid upon the issuance of the license, and the second

installment of $1,800 one year after the effective license date.)

• Branch renewal fees unknown.

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 Change

Mortgage Broker Applicant

Requirements

Experience/Education

• The applicant or the members thereof if the applicant is a partnership or association, the

members or managers thereof that retain any authority or responsibility under the operating

agreement if the applicant is a limited liability company, or the officers and directors

thereof if the applicant is a corporation must have three years experience immediately

preceding application in real estate finance OR must have satisfactorily completed a

program of education in real estate finance, as approved by the commissioner, prior to

receiving the initial license.

Net Worth

• The applicant must maintain $35,000 in net worth.

• In lieu of maintaining a full-service office in the state of Illinois, a licensee whose principal

place of business is located outside the state of Illinois must submit a certified audit

Page 50

evidencing a minimum net worth of $100,000, which must be maintained at all times, and

shall submit and maintain a fidelity bond in the amount of $100,000.

Bond

• The applicant must obtain a $20,000 surety bond.

• In lieu of maintaining a full-service office in the state of Illinois, a licensee whose principal

place of business is located outside the state of Illinois must submit a certified audit

evidencing a minimum net worth of $100,000, which must be maintained at all times, and

shall submit and maintain a fidelity bond in the amount of $100,000.

Branch Offices

In-state Requirement

• Licensees incorporated under Illinois law, licensees that maintain their principal place of

business in Illinois, and out-of-state licensees that do not maintain the required net worth

and fidelity bond must maintain an office in the state. (In lieu of maintaining a full service

office in the state of Illinois, a licensee whose principal place of business is located outside

the state of Illinois must submit a certified audit evidencing a minimum net worth of

$100,000, which must be maintained at all times, and shall submit and maintain a fidelity

bond in the amount of $100,000.)

2000 Change

Mortgage Broker Applicant

Requirements

Employee Requirements

Continuing Education

• Each licensee that employs persons within Illinois to take residential mortgage applications

from consumers is required to have those persons complete a minimum of three hours of

education in real estate finance each calendar year at a source approved by the

commissioner. Any person who becomes an employee of a licensee later than September 1

of any year shall be exempt from this education requirement in the year of his or her hire.

2001 No change

2002 No change

2003 Change

Mortgage Broker Applicant

Requirements

Licensing Fees

Initial Application

• $1,500 Application Fee

• $1,200 License Fee

Branch Application

• $250 Application Fee

Renewal Application

• $2,700 Renewal Fee (Annually)

• Branch renewal fee unknown.

2004 Change

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Net Worth

• The applicant must maintain $50,000 in net worth.

• In lieu of maintaining a full service office in the state of Illinois, a licensee whose principal

place of business is located outside the state of Illinois must submit a certified audit

evidencing a minimum net worth of $100,000, which must be maintained at all times, and

shall submit and maintain a fidelity bond in the amount of $100,000.

Employee Exemptions

• Clerical employees are exempt.

• Loan originators must register with the state.

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for registration as a “Loan Originator.”

Age

• None

Residency

• None

Education

• None

Experience

• None

Page 51

Examination

• The applicant must successfully complete an examination. An applicant is not required to

pass an examination if the applicant limits his or her activity to soliciting residential

mortgage loan applications, which includes collecting personal or financial information

from prospective borrowers for the sole purpose of conveying this information to a

licensee and its registered loan originator. The employing licensee must assume full and

direct legal responsibility for the solicitation activity performed on behalf of or in the name

of the licensee in writing.

Fitness

• The applicant must demonstrate character and general fitness.

Net Worth

• None

Bond

• None

Background Investigation

• An applicant must submit fingerprints and consent to a background investigation.

Continuing Education

• A registrant must complete six hours of continuing education.

• Any registrant who possesses a professional certification approved by the director shall be

exempt from the continuing education requirements of this section. For a professional

certification to be eligible for approval, it must require at a minimum 18 hours of

continuing education related to residential mortgage lending every three years. A Loan

Originator who is admitted to practice law pursuant to the Illinois Supreme Court rule shall

be exempt from the continuing education requirements.

License Fee

• Loan Originator Examination—$74 per sitting

• Civil Background Check—$115

• Criminal Background Check—varies per vendor

• $125 Initial Registration Fee

Renewal Fee

• Unknown

2005 No change

2006 No change

Changes with unknown effective date

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Background Investigation

• The applicant must consent to financial and business responsibility background check.

Indiana

§23-2-5-1

http://www.in.gov/sos/securities/faq_loanbroker.html

Regulation effective since: May 15, 1985

Indiana

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Indiana has regulated mortgage brokers since 1985. The Indiana Division of Securities licenses

mortgage brokers pursuant to the Loan Broker Act. Loan brokers are required to maintain a

Page 52

$50,000 bond and register all individuals that communicate with or provide assistance to a

borrower or prospective borrower in the selection of loan products or terms as loan originators.

Each licensee must employ at least one registered loan originator.

Loan originators are required to complete 24 hours of pre-licensing education. Loan originators

must also complete 12 hours of continuing education during the licensing period.

Indiana

Year Status

1996 Regulation in effect

Loan Broker Applicant

Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for an individual registration;

• A sole proprietor applying for a business registration;

• Any other business entity, however incorporated, applying for a business

registration.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• The applicant must maintain a bond in the amount of $25,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Employees are not required to register.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

• Securities broker-dealers

Safe Harbor

• None

Branch Offices

In-state Requirement

• A licensee is not required to maintain an office in the state.

License Requirement

• A licensee must obtain approval from the State before opening a branch office.

Branch Manager

• None

Licensing Fees

Initial Application

• $250 License Fee

Branch Application

• Unknown

Renewal Application

• $100 Renewal Fee (Biennially)

• Branch renewal fee unknown.

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Page 53

Renewal Fee

• None

1997 No change

1998 No change

1999 Change

Loan Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Bond

• The applicant must obtain a bond in the amount of $50,000.

Licensing Fees

Initial Application

• $200 License Fee

2000 No change

2001 Change

Loan Broker Applicant

Requirements

Education

• If the applicant is a sole proprietor or individual, the sole proprietor or individual must

complete at least 24 hours of academic instruction related to the loan brokerage business

during the preceding 24 months of the application date. (The sole proprietor or individual

would need to meet this requirement as a registered loan originator—which all loan

brokers are required to employ. Entities would need to employ a registered loan originator

that meets this requirement.)

Continuing Education

• A licensee that is a sole proprietor or an individual and is renewing his license or

certificate of registration must provide to the commissioner evidence that during the 24-

month period immediately preceding the application, the person completed at least 12

hours of academic instruction related to the loan brokerage business. Other entities would

need to provide proof that their registered loan originators completed this requirement.

Employee Requirements

• Each licensed loan broker is required to have at least one registered loan originator. The

loan originator is subject to pre-education requirements and continuing education

requirements.

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for a license as a “Loan Originator.”

Age

• None

Residency

• None

Education

• During the 24 month period immediately preceding the application, the applicant must

have completed at least 24 hours of academic instruction related to the loan brokerage

business.

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• A registrant renewing a certificate of registration must provide to the commissioner

evidence that during the 24-month period immediately preceding the application, the

registrant completed at least 12 hours of academic instruction related to the loan brokerage

business.

License Fee

• None

Renewal Fee

• None

2002 No change

2003 No change

2004 No change

2005 No change

2006 Change

Employee Requirements

Background Investigation

• Regulations effective March 1, 2006 indicate the commissioner may require the licensee to

conduct and file with the Securities Division an FBI criminal background check on each

individual the licensee applies to register as an originator under IC 23-2-5-5(c)(6).

Page 54

Iowa

§535B.1 et seq.

http://www.idob.state.ia.us

Regulation effective since: May 3, 1988

Iowa

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The Iowa Division of Banking currently licenses approximately 707 mortgage brokers pursuant

to Chapter 535B of the Iowa Code.

Natural persons who are mortgage brokers and who are

employed by, under contract with, or an agent of a licensee are also required to register annually

with the administrator. Sole proprietors and individuals that procure a mortgage broker license

are not required to register with the state; however, control persons of corporations and limited

liability companies are required to register if they originate loans secured by residential real

property located in Iowa.

Overall, Iowa has a fairly unrestrictive licensing policy. There are no education, experience, or

continuing education requirements for applicants, only a bonding requirement.

** Iowa is one several states that have adopted the national uniform mortgage licensing forms.

Iowa

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant or the members thereof if the applicant is a partnership, association, or other

organization, or of the officers, directors, and principal employees if the applicant is a

corporation must demonstrate financial responsibility, character, and general fitness.

Net Worth

• The applicant must submit financial statements.

http://www.idob.state.ia.us/public/license/Financesrch/license_results.asp

Page 55

Bond

• The applicant must maintain a bond in the amount of $15,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Any individual who is acting solely as an employee or agent of a licensed mortgage broker

is not required be separately licensed.

Licensing Exemptions

Entities

• Regulated financial institutions

• Insurance companies

• Consumer loan companies

Safe Harbor

• None

Branch Offices

In-state Requirement

• Statute does not specifically state whether there was an in-state office requirement.

However, changes to the statute in 2006 clearly indicate that there is no in-state office

requirement.

License Requirement

• None

Branch Manager

• None

Licensing Fees

Initial Application

• $500 License Fee

Branch Application

• None

Renewal Application

• $200 Renewal Fee (Annually)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 No change

2000 No change

2001 No change

2002 No change

2003 No change

2004 No change

2005 No change

2006 Change

Mortgage Broker Applicant

Requirements

Bond

• The applicant must maintain a bond in the amount of $50,000.

Employee Requirements

• An applicant is not eligible for licensing unless all individual registrants who are employed

by, under contract with, or agents of the person have successfully completed the

registration and required background checks.

• Sole proprietors and individuals who obtain a mortgage broker license are not required to

• Control persons of licensed corporations and limited liability companies or partnerships

must register with the state if they will originate loans secured by residential real property

located in Iowa.

Licensing Exemptions

Entities

• Regulated financial institutions

• Real estate agents

Page 56

• Insurance companies

• Consumer loan companies

Safe Harbor

• A mortgage broker is defined as “a person who arranges or negotiates, or attempts to

arrange or negotiate, at least four first mortgage loans or commitments for four or more

such loans on residential real property located in the state in a calendar year.”

Branch Offices

In-state Requirement

• None

License Requirement

• A licensee must notify the state if it opens a branch office.

Branch Manager

• None

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for registration as a “Mortgage Broker.”

A natural person who is a mortgage banker or mortgage broker and who is employed by, under

contract with, or is an agent of a licensee shall register annually with the administrator.

Age

• An applicant for registration must be 18 years of age.

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• The applicant must consent to a background and criminal history check.

Continuing Education

• The registrant must complete 12 hours of continuing education.

License Fee

• $50 License Fee ($50 is stated in the application; $100 is stated in the statute.)

Renewal Fee

• $100 (Annually)

Changes with unknown effective dates

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Background Investigation

• Criminal background checks may be conducted as part of the investigation process.

Kansas

§9-2201 et seq.

http://www.osbckansas.org/DOCML.html

Regulation effective since: November 1, 1996

Kansas

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Page 57

Mortgage brokers in Kansas are regulated by both the Loan Broker Act and the Mortgage

Business Act. The Loan Broker Act, administered by the Office of the Securities Commissioner,

is only applicable to mortgage brokers who collect advance fees other than bona fide third party

fees; any person whose fee is wholly contingent on the successful procurement of a loan from a

third party and to whom no fee, other than a bona fide third party fee, is paid before the

procurement is exempt from the Loan Broker Act. Pursuant to the Loan Broker Act, an applicant

must maintain a bond in the amount of $25,000 in favor of the state and pay a $250 application

fee. Registrations must be renewed annually and accompanied by a $100 renewal fee.

The Mortgage Business Act requires that all mortgage brokers obtain a license and all loan

originators register with the Division of Consumer and Mortgage Lending of the Office of the

State Bank Commissioner. Although the Mortgage Business Act has no experience or education

requirements for applicants, it does require that all applicants with a bona fide office obtain a

$50,000 bond. Applicants without a bona fide office must maintain a $100,000 bond and

$50,000 in net worth. In addition, any individual (including owners, officers, and directors)

conducting origination activities must register with the state and complete eight hours of

continuing education annually.

Kansas

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for an individual registration;

• A sole proprietor applying for a business registration;

• Any other business entity, however incorporated, applying for a business

registration.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate financial responsibility and condition, character,

qualifications, and fitness.

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Employees are not required to register.

Licensing Exemptions

Entities

• Regulated financial institutions

• Consumer loan companies

• Loan brokers

Safe Harbor

• None

Branch Offices

In-state Requirement

• None

License Requirement

• None

Branch Manager

• None

Licensing Fees

Initial Application

• Not less than $100.

Page 58

Branch Application

• None

Renewal Application

• Renewal fee unknown. (Annually)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 Change

Mortgage Broker Applicant

Requirements

Net Worth/Bond

• If the applicant has a bona fide office, the applicant may either maintain a net worth of

$100,000 OR obtain a bond in the amount of $25,000.

• If the applicant does not have a bona fide office, the applicant must maintain a net worth of

$50,000 AND a bond for $100,000.

Branch Offices

License Requirement

• A licensee must notify the state if it intends to open a branch office.

Licensing Fees

Renewal Application

• Renewal fee unknown. (Biennially)

2000 No change

2001 Change

Mortgage Broker Applicant

Requirements

Net Worth

• If the applicant does not have a bona fide office, the applicant must maintain a net worth of

$50,000.

Bond

• If the applicant has a bona fide office, the applicant must maintain a bond in the amount of

$50,000.

• If the applicant does not have a bona fide office, the applicant must maintain a bond in the

amount of $100,000.

Continuing Education

• Any owner, officer, director, or manager conducting loan origination activities must also

Employee Requirements

• All persons conducting loan origination activities must register with the state (including

owners, officers, directors, etc.). A registrant shall only engage in mortgage business on

behalf of one mortgage company.

Branch Offices

In-state Requirement

• A licensee is not required to maintain an office in the state.

License Requirement

• A licensee must obtain a license for each branch office.

Branch Manager

• None

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for registration as a “Loan Originator.”

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Page 59

Fitness

• The applicant must demonstrate fitness.

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• License fee not to exceed $50.

Renewal Fee

• Renewal fee unknown. (Annually)

2002 No change

2003 No change

2004 No change

2005 No change

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Background Investigation

• The applicant or each individual owner/member with an ownership interest of 10 percent

or more, officer, or partner must submit fingerprints.

Licensing Fees

Initial Application

• $600 Application Fee (Applicant must also pay $54 for fingerprint processing.)

Branch Application

• $200 Branch Application Fee

Renewal Application

• $400 Renewal Fee (Biennially)

• $200 Branch Renewal Fee (Biennially)

Employee Requirements

Background Investigation

• The applicant must submit fingerprints and consent to a background check.

License Fee

• $75 License Fee (Applicant must also pay $54 for fingerprint processing.)

Renewal Fee

• $50 (Annually)

2006 No change

Kentucky

§294.010 et seq.

http://www.kfi.ky.gov/

Regulation effective since: July 15, 1980

Kentucky

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The Department of Public Protection of the Office of Financial Institutions regulates both

mortgage loan brokers and their employees pursuant to the Mortgage Loan Company and

Page 60

Mortgage Loan Broker Act. The Commonwealth has approximately 290 principal licenses, 23

branch licenses, and 1,008 originator licenses issued.

To obtain a license in Kentucky, at least one individual (the sole proprietor, primary owner, or

designated manager) must complete 30 hours of pre-licensing education and an additional 12

hours of continuing education annually. The applicant must also submit proof that at least one

owner (of 20 percent or more) has at least two years of experience in the industry and maintain a

bond in the amount of $50,000.

Kentucky has a stricter registration requirement than most states. All persons who discuss or

negotiate the rates, terms, and conditions of a loan with a borrower or prospective borrower must

licensed corporations, partnerships, etc. Registrants must obtain 12 hours of pre-licensing

education and complete an additional 12 hours of continuing education annually.

Kentucky

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• No mortgage loan broker’s license may be granted to a person unless the person is a bona

fide resident of the state for a period of at least six months immediately preceding the date

of licensing.

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate financial responsibility, financial condition, business

expertise, character, and general fitness.

Net Worth

• The applicant must submit financial statements.

Bond

• The applicant must maintain a bond in the amount of not less than $25,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• If a licensee is a person other than a natural person, the license issued to it shall entitle all

officers and employees of the person, if a corporation, and all members, partners, trustees,

and employees, if an association, partnership, or trust, to engage in the mortgage loan

business.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

• Consumer loan companies

• Securities broker-dealers

Safe Harbor

• Persons making five or less mortgage loans in any period of 12 consecutive months are

exempt.

Branch Offices

In-state Requirement

• A licensee must maintain an in-state office.

License Requirement

• A licensee must notify the department if it intends to open a branch office.

http://www.fi.ky.gov/scr/ifs/ifssearch.asp?div=cs

Page 61

Branch Manager

• None

Licensing Fees

Initial Application

• $150 Application Fee

• $300 License Fee

Branch Application

• $40 Application Fee

• $200 License Fee

Renewal Application

• $300 Renewal Fee (Annually)

• $200 Branch Renewal Fee (Annually)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 Change

Mortgage Broker Applicant

Requirements

Education

• If the applicant is a natural person, or is a corporate entity owned by a natural person(s),

the primary owner responsible for day-to-day management must take 30 hours of pre-

licensing education. If the applicant is owned by a corporate entity, the designated

manager must take 30 hours of pre-licensing education.

Bond

• The applicant must maintain a bond in the amount of not less than $50,000.

Branch Offices

In-state Requirement

• A licensee is not required to have an office in-state.

License Requirement

• A licensee must register each branch office.

Licensing Fees

Initial Application

• $300 Application Fee

• $450 License Fee

Branch Application

• $150 Application Fee

• $250 License Fee

Renewal Application

• $350 Renewal Fee (Annually)

• $250 Branch Renewal Fee (Annually)

1999 No change

2000 No change

2001 No change

2002 No change

2003 Change

Branch Offices

In-state Requirement

• A licensee is required to have an office in-state.

2004 Change

Mortgage Broker Applicant

Requirements

Continuing Education

• The individual designated responsible (and completing the 30 hours of pre-licensing

education) must complete 12 hours of continuing education annually.

Employee Exemptions

• Anyone (including sole proprietors, designated individuals, owners, officers, principals,

etc.) who discusses or negotiates the rates, terms, and conditions of a loan with a borrower

Page 62

or prospective borrower must be registered.

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for registration as a “Loan Officer.”

Age

• None

Residency

• None

Education

• The applicant must successfully complete 12 classroom hours of education courses related

directly to the mortgage loan process or brokerage business.

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Check

• The applicant must submit a complete set of fingerprints and consent to an FBI criminal

background check.

Continuing Education

• The registrant must complete 12 hours of continuing education annually.

License Fee

• $50 Registration Fee

Renewal Fee

• $50 Renewal Fee (Annually)

2005 No change

2006 Change

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Experience

• The applicant must submit sufficient proof that the applicant or at least one owner of 20

percent or more has a minimum of two years’ experience working in the mortgage

industry.

Bond

• The applicant must maintain a bond in the amount of $50,000.

Changes with unknown effective date

Mortgage Broker Applicant

Requirements

Net Worth

• The applicant must submit current, signed and dated, financial statements (balance sheet)

on any person or entity owning 10 percent or more of the applicant.

Background Check

• The applicant (or any person named on application) must consent to background and credit

history check.

Page 63

Louisiana

§6:1081 et seq.

http://www.ofi.state.la.us/newrml.htm

Regulation effective since: July 1, 1988

Louisiana

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Mortgage brokers in Louisiana have been regulated pursuant to three different laws over the past

decade. Mortgage brokers were originally licensed under the Mortgage Brokers and Lenders

Law until the law was repealed in 1997. Regulation of mortgage brokers then fell under the

Consumer Credit Law until 2000 when the Residential Mortgage Lending Law was enacted.

The Residential Mortgage Lending Law permits partnerships, limited liability companies, and

corporations to obtain a license, but only allows the entity to engage in residential mortgage

lending activity through natural persons who are licensed as mortgage brokers or originators.

Therefore, every control person and employee that engages in brokering activities is required to

obtain a loan originator license, including sole proprietors. One originator must be designated on

the licensee’s record. Although there are no specific educational or experience requirements for

the entity’s control persons, as loan originators they would be required to complete ten hours of

pre-licensing education. Louisiana also requires that a mortgage broker licensee maintain either

$50,000 in net worth or a $50,000 surety bond.

The Office of Financial Institutions currently licenses approximately 972 mortgage brokers and

lenders and 5,821 loan originators (this number includes licensed loan originators that are

working for mortgage lenders).

Louisiana

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

http://www.ofi.state.la.us/newrml.htm (accessed September 1, 2006)

Page 64

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant, its owners, and of the members thereof, if the applicant is a partnership or

association, and of the officers and directors thereof, if the applicant is a corporation must

demonstrate financial responsibility, character, and fitness.

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Employees are exempt.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

Safe Harbor

• Persons making ten or less mortgage loans in any period of 12 consecutive months are

exempt.

Branch Offices

In-state Requirement

• A licensee is not required to maintain an office in the state.

License Requirement

• If a license is required for an applicant that has multiple office locations, all such offices

can be included under a single license by including in the application for such license the

address and the location of each office operated by the same applicant.

Branch Manager

• None

Licensing Fees

Initial Application

• $100 License Fee

Branch Application

• None

Renewal Application

• Unknown (Annually)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 Change (Original Mortgage Brokers and Lenders Law was repealed, moving regulation of mortgage brokers under the Consumer

Credit Law.)

Consumer Loan Broker

Applicant

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for an individual “Consumer Loan Broker” registration;

• A sole proprietor applying for a business registration;

• Any other business entity, however incorporated, applying for a business

registration.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant and its principals, owners, officers, directors, partners, members, and

managers must demonstrate financial responsibility, character, and fitness.

Net Worth

• None

Bond

• The applicant must maintain a bond in the amount of $25,000. An applicant who will be

Page 65

covered by a corporate bond (e.g. the employer bond) is not required to obtain a bond.

Background Investigation

• None

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• All consumer loan brokers must obtain a license.

• A corporation that is a loan broker shall be licensed and shall act as a consumer loan

broker only through natural persons who are registered consumer loan brokers.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

Safe Harbor

• None

Branch Offices

In-state Requirement

• A registrant is required to maintain an office in the state.

License Requirement

• Not clear

Branch Manager

• None

Licensing Fees

Initial Application

• $100 License Fee

Branch Application

• None

Renewal Application

• $100 (Annually)

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for a license as a “Consumer Loan Broker.” (This is the

SAME as the requirements above.)

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• The applicant must demonstrate financial responsibility, character, and fitness.

Net Worth

• None

Bond

• The applicant must maintain a bond in the amount of $25,000. An applicant who will be

covered by a corporate bond (e.g., his employer bond) is not required to obtain a bond.

Background Investigation

• None

Continuing Education

• None

License Fee

• $100 License Fee

Renewal Fee

• $100 Renewal Fee (Annually)

1998 No change

1999 No change

2000 Change (Mortgage Brokers and Lenders Law was enacted again.)

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• Each applicant must have a licensed loan originator on record. The licensed loan

originator must obtain ten hours of professional education prior to the date on which the

application is submitted.

Examination

• None

Fitness

• The applicant, its owners, and its members, if the applicant is a partnership, and its officers

and directors, if the applicant is a corporation, must demonstrate financial responsibility,

character, and fitness.

Net Worth/Bond

• The applicant must have $50,000 in net worth or obtain a bond in the amount of $50,000.

Background Investigation

• None

Continuing Education

• Each applicant must have a licensed loan originator on record. The licensed loan

Page 66

originator is required to obtain ten hours of continuing education courses annually.

Managing Principal

• Any licensee under the Residential Mortgage Lending Act may engage in Residential

Mortgage Lending Activity only through natural persons who are licensed as a Mortgage

Broker, Mortgage Lender, or Originator, or who are registered or exempt from the

Residential Mortgage Lending Act.

• If an individual or sole proprietor is going to engage in brokering activities, the individual

or sole proprietor must be the licensed loan originator on record. The individual or sole

proprietor would then need to meet the pre-licensing education and post-licensing

education requirements.

Employee Exemptions

• Clerical employees are exempt.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Insurance companies

• Consumer loan companies

Safe Harbor

• Any person, who contracts for no more than four residential loan transactions over any

calendar year, including those acting as originators, is exempt.

Branch Offices

In-state Requirement

• A licensee is not required to maintain an office in the state.

License Requirement

• A licensee must notify the state when it intends to open a branch office.

Branch Manager

• None

Licensing Fees

Initial Application

• License Fee not to exceed $400.

Branch Application

• $100 License Fee for all offices opened (not including those registered with original

application).

Renewal Application

• Renewal Fee not to exceed $300. (Annually)

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for a license as an “Originator.”

Age

• None

Residency

• None

Education

• The applicant must complete ten hours of professional education prior to the date on which

the application is submitted.

Experience

• None

Examination

• None

Fitness

• The applicant must demonstrate financial responsibility, character, and fitness.

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• The applicant must complete ten hours of continuing education courses annually.

License Fee

• License Fee not to exceed $100.

Renewal Fee

• Renewal Fee not to exceed $100. (Annually)

2001 No change

2002 No change

2003 No change

2004 No change

2005 Change

Licensing Exemptions

Safe Harbor

• None

Employee Requirements

Examination

• The applicant is required to successfully complete an examination. Individuals who have

received a bachelors or masters degree in an area related to finance, banking, or business

administration from an accredited college or university and have had within the three

years immediately preceding the date of the application 12 months’ experience in the

mortgage lending field as evidenced by documentary proof of full-time employment by a

mortgage broker, mortgage lender, originator, or a person exempt are not required to take

the examination. Individuals who have had within the three years immediately preceding

the date of the application 24 months’ experience in the mortgage lending field as

evidenced by documentary proof of full-time employment by a mortgage broker,

Page 67

mortgage lender, originator, or by a person exempt are not required to take the

examination.

2006 Change

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Background Investigation

• The applicant or its owners, directors, and officers must submit fingerprints and consent to

a background check.

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for a license as a “Loan Originator.”

Background Investigation

• The applicant is required to submit a set of fingerprints and submit to a background

check.

License Fee

• $100 License Fee and $50 Fingerprint Fee

Maine

Tit. 9-A §10-101 et seq.

http://www.state.me.us/pfr/ccp/ccp_index.htm

Regulation effective since: January 1, 1990

Maine

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Pursuant to the Consumer Credit Code, the Office of Consumer Credit Regulation of the Maine

Department of Professional and Financial Regulation licenses approximately 554 loan brokers.

Maine recently began registering loan officers as well.

Overall, Maine has a relatively unrestrictive licensing policy. Applicants for a loan broker

license are only required to maintain a bond in the amount of $25,000. Control persons of

entities such as partnerships and corporations who have direct contact with Maine consumers are

required to register as loan officers; sole proprietors, on the other hand, are not required to

http://www.state.me.us/pfr/ccp/ccp_licensing.htm

Page 68

Maine

Year Status

1996 Regulation in effect

Credit Services Organization

Applicant Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for an individual registration;

• A sole proprietor applying for a business registration;

• Any other business entity, however incorporated, applying for a business

registration.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant and where applicable, its partners, officers, or directors must demonstrate

financial responsibility, character, and fitness to warrant belief that the business will be

operated honestly and fairly within the purposes of this Title.

Net Worth

• None

Bond

• The applicant must obtain a bond in the amount of $10,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• It is unclear whether all individual employees of a credit services organization were

required to register separately.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

Safe Harbor

• None

Branch Offices

In-state Requirement

• None

License Requirement

• None stated.

Branch Manager

• None

Licensing Fees

Initial Application

• $200 License Fee

Branch Application

• Unknown

Renewal Application

• $100 Renewal Fee

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 No change

2000 No change

2001 No change

2002 No change

2003 No change

Page 69

2004 No change

2005 Change

Loan Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant, and where applicable, its partners, officers, or directors must demonstrate

financial responsibility, character, and fitness.

• In addition, the applicant must submit one resume and two letters of professional reference

for the applicant and each principal officer, owner, or partner; and two letters of reference

regarding the applicant’s background in the financial services field.

Net Worth

• None

Bond

• The applicant must obtain a bond in the amount of $25,000 and an additional $25,000

bond for each licensed branch office.

Background Investigation

• None specifically stated.

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Clerical employees are exempt from licensure. (Loan officers are no longer exempt, but

are not required to register until 2006.)

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

Safe Harbor

• None

Branch Offices

In-state Requirement

• None

License Requirement

• A licensee must obtain a license for each branch office.

Branch Manager

• A licensee must submit a résumé of the branch manager and two professional letters of

reference for that individual.

2006 Change

Loan Broker Applicant

Requirements

Employee Exemptions

• Clerical employees are exempt from licensure.

• An individual who holds a lender or loan broker license under a D/B/A (Doing Business

As) name does not need to register himself or herself as a loan officer.

• 1099 employees are considered contract workers and must be separately licensed in a

branch location, which can be their home residence. W-2 employees working at a licensed

location (main office or branch) need not be individually licensed.

Licensing Fees

Initial Application

• $400 License Fee

Branch Application

• $200 License Fee (May have been effective in 2005).

Renewal Application

• $100 Renewal Fee (Annually)

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for registration as a “Loan Officer.”

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• The applicant must demonstrate character and fitness.

Net Worth

• None

Page 70

Bond

• None

Background Investigation

• None specifically stated.

Continuing Education

• None

License Fee

• The Registration Fee is $20 per loan officer per year, up to a maximum of $200 per

company per year.

Renewal Fee

• None

Maryland

Fin. Inst. Code §11-501 et seq.

http://www.dllr.state.md.us/license/fin_reg/mortlend/

Regulation effective since: July 1, 1968

Maryland

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Maryland has a long history of mortgage broker regulation. Pursuant to the Maryland Mortgage

Lender Law, the Office of Financial Regulation licenses mortgage lenders, which include

persons engaging in brokering activities; in addition, Maryland just recently began licensing

mortgage originators pursuant to Subtitle 6 of the Consumer Credit Title. The Mortgage Lender

Law has experience, fitness, financial credibility, and continuing education requirements for

mortgage lender licensees.

Although Maryland does not require that a licensed mortgage lender maintain a physical

presence in the state, applicants for a mortgage originator license are not eligible for licensing

until the employing mortgage lender has established an office in the state. Therefore, out-of-

state mortgage lenders without a physical presence in Maryland that intend to register their

mortgage originators may not do so until the lender opens an office in Maryland that is staffed by

at least one eligible employee.

Mortgage originator licensees are required to fulfill an experience requirement or an education

and examination requirement. Mortgage originators are also required to complete continuing

education hours during the licensing period. Only individuals that own 25 percent or more of the

mortgage lender license are exempt from mortgage originator licensing.

Maryland

Year Status

Page 71

1996 Regulation in effect

Mortgage Lender Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate good moral character and sufficient financial

responsibility, business experience, and general fitness.

Net Worth

• None

Bond

• If the applicant has not conducted a mortgage lender’s business in Maryland in any of the

three calendar years preceding the year in which an original application for license is filed,

the surety bond required is $12,500.

• If the applicant has conducted a mortgage lender’s business in Maryland in any of the three

calendar years preceding the year in which an original or renewal application is filed, the

applicant shall provide a sworn statement setting forth the total dollar amount of mortgage

loans applied for and accepted or mortgage loans applied for, procured, and accepted by

the mortgage lender during the latest calendar year such business was conducted and the

bond required shall be determined as follows:

Where the total dollar amount of stated loans was $1,000,000 or less, the bond shall be in

the amount of $12,500.

Where the total dollar amount of stated loans was more than $1,000,000 but not more than

$2,000,000, the bond shall be in the amount of $17,500.

Where the total dollar amount of stated loans was more than $2,000,000 but not more than

$3,000,000, the bond shall be in the amount of $25,000.

Where the total dollar amount of stated loans was more than $3,000,000, the bond shall be

in the amount of $50,000.

Subject to approval by the commissioner, if the applicant files four or more original or

renewal applications at the same time, the applicant may provide a blanket surety bond for

all licensed offices in the amount of $200,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Employees are not required to register or obtain a license.

Licensing Exemptions

Entities

• Regulated financial institutions

• Real estate agents

• Insurance companies

Safe Harbor

• A person may act as a mortgage broker on up to three loans without obtaining a license.

Branch Offices

In-state Requirement

• A licensee is not required to maintain an office in the state.

License Requirement

• A licensee must obtain an additional license for each branch office.

Branch Manager

• None

Licensing Fees

Initial Application

• $500 License Fee

• $100 Application Fee and cost of fingerprints

Branch Application

• $500 Branch License Fee

Renewal Application

• $500 Renewal Fee (Annually)

• $500 Branch Renewal Fee (Annually)

Employee Requirements

Age

• None

Residency

• None

Page 72

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 Change

Mortgage Lender Applicant

Requirements

Experience

• The applicant must have at least three years of experience in the mortgage lending

business. If the applicant is a sole proprietor, the applicant shall have the required

experience. If the applicant is a joint venture, or general or limited partnership, at least one

of the coventurers or general partners shall have the required experience. If the applicant

is a business entity of any other kind, type, or classification, at least one of the principal

officers or members shall have the required experience.

Bond

• If the applicant has not conducted a mortgage lending business any time during the 36

months prior to the filing of an original application for a license, the applicant shall

provide a sworn statement setting forth that fact, and shall file with the original application

a surety bond in the amount of $15,000.

• If an applicant has conducted a mortgage lending business any time during the 36 months

prior to the filing of an original application, but during that time has not acted as a

mortgage lender in Maryland, the applicant shall provide with the original application a

sworn statement setting forth the aggregate principal amount of loans secured or to be

secured by residential real property located in states other than Maryland and applied for,

procured, and accepted by the mortgage lender during the 12 months preceding the month

in which the application is filed.

Where the aggregate principal amount of loans set forth in the sworn statement was

$3,000,000 or less, a surety bond in the amount of $25,000.

Where the aggregate principal amount of loans set forth in the sworn statement was more

than $3,000,000 but not more than $10,000,000, a surety bond in the amount of $50,000.

Where the aggregate principal amount of loans set forth in the sworn statement was more

than $10,000,000, a surety bond in the amount of $75,000.

Notwithstanding any other provisions of this section, and subject to approval by the

commissioner, if an applicant files five or more original or renewal applications at the

same time, the applicant may provide a blanket surety bond for all licensed offices in the

amount of $375,000.

Background Investigation

• The applicant must submit fingerprints. (According to current information, fingerprinting

is required of the president, all officers who own 10 percent or more, and any other

individual requested by the commissioner of a corporation; the president, all officers who

own 10 percent or more, and any other individual requested by the commissioner of a

partnership, LLP, or unincorporated association. The current information does indicate

that sole proprietors or individuals must submit fingerprints.)

Licensing Exemptions

Safe Harbor

• A person may act as a mortgage broker on one loan without obtaining a license.

Licensing Fees

Initial Application

• $1000 License Fee ($1,000 if the applicant applies for a license to be issued on or after

January 1 and on or before December 31 of an even-numbered year; effective January 1,

1999, $500 if the applicant applies for a license to be issued on or after January 1 and on or

before December 31 of an odd-numbered year.)

• $100 Application Fee and cost of fingerprinting

Branch Application

• $500 Branch License Fee

Renewal Application

• $1000 Renewal Fee (Biennially)

• $500 Branch Renewal Fee (Biennially)

1998 No change

Page 73

1999 No change

2000 No change

2001 Change

Mortgage Lender Applicant

Requirements

Continuing Education

• All covered employees, defined as, “the manager of each branch office maintained by a

licensee and all employees who have the authority to accept loan applications, and as part

of their official duties, directly contact borrowers to negotiate or advise regarding loan

terms,” must satisfy the continuing education requirements during each licensing period

(20 hours biennially).

Branch Offices

Branch Manager

• All covered employees, defined as, “the manager of each branch office maintained by a

licensee and all employees who have the authority to accept loan applications, and as part

of their official duties, directly contact borrowers to negotiate or advise regarding loan

terms,” must satisfy the continuing education requirements during each licensing period

(20 hours biennially).

Employee Requirements

Continuing Education

• All covered employees, defined as, “the manager of each branch office maintained by a

licensee and all employees who have the authority to accept loan applications, and as part

of their official duties, directly contact borrowers to negotiate or advise regarding loan

terms” must satisfy the continuing education requirements during each licensing period (20

hours biennially).

2002 No change

2003 No change

2004 Change

Mortgage Lender Applicant

Requirements

Experience

• The applicant must have at least three years of experience in the mortgage lending

business. If the applicant is a sole proprietor, the applicant shall have the required

experience. If the applicant is a joint venture, or general or limited partnership, at least one

of the coventurers or general partners shall have the required experience. If the applicant

is a business entity of any other kind, type, or classification, at least one of the principal

officers or members shall have the required experience.

• The commissioner may issue a license to an applicant who is a sole proprietor and who

does not meet the experience requirement if the applicant is a licensed insurance producer

in good standing under §10-103 of the Insurance Article and holds an appointment as an

insurance producer for an insurer that controls, is controlled by, or is under common

control with a financial institution described in §11-502(b)(1) of this subtitle.

The applicant must limit his activities to brokering mortgage loans made by the single

financial institution identified above; the financial institution and affiliated insurer with

which the applicant holds a current appointment are identified in the applicant’s

application; the commissioner approves the selection of the financial institution based on

statutory criteria.

The applicant has successfully completed at least 20 hours of classroom instruction in

residential mortgage lending courses as provided in regulations adopted by the

commissioner and achieved a passing grade on a written exam developed and administered

by the person that conducts the classroom education course.

An authorized representative of the financial institution signs the license application; and

the financial institution agrees to: supervise the applicant, including providing direction

through written instructions or electronic means and by periodically examining the

applicant’s books, records, and other aspects of the business; and be held jointly and

severally liable with the applicant for claims arising out of the applicant’s mortgage

brokering activities.

2005 No change

2006 No change

2007 Change

Mortgage Lender Applicant

Page 74

Requirements

Net Worth

• The applicant must submit financial statements. According to current information, the

applicant must submit a current (within the last 12 months) reviewed or audited financial

statement by public accounting firm or CPA, including assets, liabilities, net worth, and

income. If the business is a new entity, the following is acceptable: a balance sheet for the

entity by a public accounting firm or CPA and a current personal financial statement(s) for

the president, partners and any stakeholder or stockholder who owns or controls 10 percent

or more of the corporation or LLC. The personal financial statement must be notarized and

contain a statement, attesting that the information is true.

Employee Exemptions

• Clerical employees are exempt.

• Individuals acting as mortgage originators must obtain a license and are not allowed to be

simultaneously employed by more than one mortgage broker.

• If an individual owns 25 percent or more of the mortgage lender licensee, the individual

does not need to obtain a mortgage originator license.

• An independent contractor must obtain a mortgage lender license.

Branch Offices

In-state Requirement

• None. BUT, mortgage originators are not eligible for a mortgage originator license until

the establishment of an office in Maryland by the licensee that is staffed by at least one

employee eligible to originate mortgage loans.

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for a license as a “Mortgage Originator.”

Age

• None

Residency

• None

Education/Experience

• The applicant may take 40 hours of classroom education and pass an examination OR

• The applicant may show proof of three years’ experience in the mortgage lending business

AND show proof of completion of any required courses for continuing education.

Examination

• Required if the applicant does not meet the experience and continuing education

requirement.

Fitness

• The applicant must demonstrate good moral character and general fitness.

Net Worth

• None

Bond

• None

Background Investigation

• The applicant must submit fingerprints and agree to a background check.

Continuing Education

• All covered employees, defined as, “the manager of each branch office maintained by a

licensee and all employees who have the authority to accept loan applications, and as part

of their official duties, directly contact borrowers to negotiate or advise regarding loan

terms,” must satisfy the continuing education requirements during each licensing period

(20 hours biennially).

License Fee

• $300 License Fee

• $100 Application Fee

Renewal Fee

• $300 Renewal Fee (Biennially)

Changes with unknown effective dates

Licensing Fees

Initial Application

• $1000 License Fee ($1,000 if the applicant applies for a license to be issued on or after

January 1 and on or before December 31 of an even-numbered year; effective January 1,

1999, $500 if the applicant applies for a license to be issued on or after January 1 and on or

before December 31 of an odd-numbered year.)

• $100 Application Fee and cost of fingerprints

Branch Application

• $1000 Branch License Fee

• $100 Application Fee

Renewal Application

• $1000 Renewal Fee (Biennially)

• $1000 Branch Renewal Fee (Biennially)

Page 75

Massachusetts

Gen. L. Ch. 255 E et seq.

http://www.mass.gov/oca/

Regulation effective since: January 1, 1992

Massachusetts

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The Massachusetts Division of Banks regulates approximately 1,649 mortgage brokers pursuant

to Chapter 255E of the Massachusetts General Laws.

Mortgage broker applicants are required

to demonstrate to the commissioner’s satisfaction that the applicant, and its applicable officers

and employees, possess the necessary educational and business experience to engage in the

business of a mortgage broker. Although applicants are not required to maintain a bond or a

minimum net worth, according to the division’s web site, “The division assesses the applicant’s

financial responsibility and does not consider a negative or zero net worth to be financially

responsible. An applicant must be capitalized in order to maintain a positive net worth.”

Applicants are not required to maintain an office within the commonwealth and there are no

requirements for employees of licensees at this time.

** Massachusetts is one several states that have adopted the national uniform mortgage licensing

forms.

Massachusetts

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant or the partners or members thereof if the applicant is a partnership or

association, and of the officers, directors, and principal employees if the applicant is a

corporation must demonstrate financial responsibility, character, reputation, integrity, and

http://db.state.ma.us/dob/licenseelist.asp

Page 76

general fitness.

Net Worth

• None

Bond

• None

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Any person who is employed by or associated with a licensed mortgage broker in the

capacity of a mortgage broker under the direction of said licensed mortgage broker shall

not be required to obtain such license.

Licensing Exemptions

Entities

• Regulated financial institutions

• Real estate agents

• Insurance companies

• Consumer loan companies

Safe Harbor

• A person may broker up to four loans without obtaining a mortgage broker license.

Branch Offices

In-state Requirement

• None

License Requirement

• A licensee must notify the state if the licensee intends to open a branch location.

Branch Manager

• None

Licensing Fees

Initial Application

• Unknown

Branch Application

• Unknown

Renewal Application

• Unknown

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 Change

Mortgage Broker Applicant

Requirements

Experience/Education

• The applicant shall provide evidence of one year of experience working for a licensed

mortgage broker, mortgage lender, or financial institution exempt from licensing under

G.L. c. 255E, or a similar institution licensed or chartered in a state other than

Massachusetts.

• If the applicant demonstrates less than one year, but more than six months of experience,

the completion of a formal course of training that covers, at a minimum, Massachusetts

laws covering the mortgage lending transaction, as well as mortgage processing issues,

may take the place of six months of professional experience.

• Where an applicant shall oversee other individuals who will engage in the activities of a

mortgage broker under the applicant’s license, the individual shall demonstrate not less

than two years’ experience.

(Regarding who must demonstrate experience/education: “an applicant shall demonstrate

to the commissioner’s satisfaction that the applicant, and its applicable officers and

employees, possess the necessary educational and business experience to engage in the

business of a mortgage lender or a mortgage broker” as cited in Regulatory Bulletin 5.1-

102. This bulletin was first issued on May 15, 1998 to formalize standards which the

division has used as guidance in licensing under G.L. chapter 255E. The bulletin was

revised in 2002 as a result of amendments to G.L. c. 140 by Chapter 50 of the Acts of

Page 77

2000.)

Examination

• None

Branch Offices

Branch Manager

• Where an applicant shall oversee other individuals who will engage in the activities of a

mortgage broker under the applicant’s license, the individual shall demonstrate not less

than two years’ experience.

(Regarding who must demonstrate experience/education: “an applicant shall demonstrate

to the commissioner's satisfaction that the applicant, and its applicable officers and

employees, possess the necessary educational and business experience to engage in the

business of a mortgage lender or a mortgage broker” as cited in Regulatory Bulletin 5.1-

102. This bulletin was first issued on May 15, 1998 to formalize standards which the

division has used as guidance in licensing under G.L. chapter 255E. The bulletin was

revised in 2002 as a result of amendments to G.L. c. 140 by Chapter 50 of the Acts of

2000.)

1998 No change

1999 No change

2000 No change

Licensing Exemptions

Entities

• Regulated financial institutions

• Real estate agents

• Insurance companies

2001 No change

2002 No change

2003 No change

2004 No change

2005 No change

2006 No change

Changes with unknown effective dates

Mortgage Broker Applicant

Requirements

Net Worth

• An applicant is required to demonstrate and provide the commissioner with evidence of its

financial responsibility and submit a sworn statement which states that the applicant meets

the foregoing requirement. (From the web site: “While there is no specific regulatory net

worth requirement for mortgage brokers, the division must assess the applicant's financial

responsibility. The division does not view the maintenance of a negative or zero net worth

as a demonstration of financial responsibility. A broker must be capitalized to ensure that it

maintains a positive net worth.”

Background Investigation

• The applicant, each control person listed on the application, and branch managers must file

a Biographical Statement and Consent form. The division does not require fingerprint

cards; however criminal background investigations are run during the license application

process.

Branch Offices

License Requirement

• A licensee must obtain a separate license for each branch office.

Licensing Fees

Initial Application

• $600 License Fee

Branch Application

• $50 Branch License Fee

Renewal Application

• $600 Renewal Fee (Annually)

• $50 Branch Renewal Fee (Annually)

Page 78

Michigan

§445.1651 et seq.

http://www.michigan.gov/cis

Regulation effective since: November 18, 1987

Michigan

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Pursuant to the First Mortgage Act, Michigan’s Office of Financial and Insurance Services

licenses approximately 1,668 mortgage brokers.

The First Mortgage Act requires that

applicants for a mortgage broker license demonstrate fitness and financial credibility. Applicants

who receive funds from a prospective borrower prior to the closing of a mortgage loan are also

required to maintain a minimum net worth of $25,000 and a $25,000 surety bond. Michigan

does not require specific experience or education of applicants, nor does it regulate employees of

licensees.

Michigan

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant and its officers, directors, shareholders, partners, and affiliates must

demonstrate experience, character, business reputation, and general fitness.

Net Worth/Bond

• An applicant who receives funds from a prospective borrower prior to the closing of the

mortgage loan shall have a minimum net worth of $25,000 and maintain a bond in the

amount of $25,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• A person who is solely performing services as a full-time employee of a mortgage broker

is not required to register or obtain a license.

http://www.dleg.state.mi.us/fis/ind_srch/cons_fin/ofis_consumer_finance_criteria.asp

Page 79

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Consumer loan companies

Safe Harbor

• None

Branch Offices

In-state Requirement

• None

License Requirement

• A licensee must notify the State when opening a branch office.

Branch Manager

• None

Licensing Fees

Initial Application

• Unknown

• The applicant shall pay an application fee of not less than $400 or more than $1,000.

Branch Application

• Unknown

Renewal Application

• A licensee shall annually pay an operating fee based upon the number of closed mortgage

loans brokered to other parties as of December 31 of the previous calendar year. The

operating fee during the first year after enactment of this amendatory language shall be not

less than $250 and not more than $2,500.

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 No change

2000 No change

2001 No change

2002 No change

2003 No change

2004 No change

2005 No change

2006 No change

Changes with unknown effective dates

Mortgage Broker Applicant

Requirements

Net Worth

• All applicants must maintain a net worth of $25,000.

• The applicant must also submit financial statements.

Background Investigation

• Each individual applicant, partner, officer, director, shareholder and affiliate identified on

the application must submit individual Personal Disclosure Statements and Confidential

Background Information Consent Forms.

Licensing Fees

Initial Application

• $150 License Fee

• $450 Application Fee

Branch Application

• Unknown

Renewal Application

• $150 Renewal Fee

Page 80

Minnesota

§58 et seq.

http://www.state.mn.us/

Regulation effective since: August 1, 1999

Minnesota

1996

1997

1998

1999

2000

2001

2002

2003

2004

200

2006

Measure of

Restrictiveness

(0 - 16)

The Minnesota Department of Commerce regulates mortgage brokers pursuant to the Residential

Mortgage Originator and Servicer Licensing Act (Chapter 58). Requirements for licensees

include: age, fitness, and financial solvency. The Minnesota legislature recently amended the

statute so that any individual who has been convicted of a criminal offense involving dishonesty

or a breach of trust or money laundering, or has agreed to or entered into a pretrial diversion or

similar program in connection with a prosecution for such offense, may not obtain a license as

residential mortgage originator or be employed in that capacity by a person licensed as a

mortgage originator, unless the commissioner grants an exception. Therefore, licensees are

required to conduct a thorough criminal background investigation on all their employees. There

are no other requirements for employees of licensees.

The department currently has 5,764 inactive and active licensees on its roster.

Minnesota

Year Status

1996 No regulation

1997 No regulation

1998 No regulation

1999 Regulation in effect

Residential Mortgage Originator

Applicant Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• The applicant or persons in control of the license must be 18 years of age.

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant must provide information as to the mortgage lending, servicing, or brokering

https://www.egov.state.mn.us/Commerce/license_lookup.do?action=lookupForm accessed 12/10/2006.

Page 81

experience of the applicant and persons in control of the applicant.

Net Worth

• An applicant must provide proof of financial solvency.

Bond

• None

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Employees of a licensee are not required to register or obtain a license.

• Independent contractors are required to obtain a license.

Licensing Exemptions

Entities

• Regulated financial institutions

• Real estate agents

• Insurance companies

Safe Harbor

• A person who is not in the business of making residential mortgage loans and who makes

no more than five such loans, with his or her own funds, during any 12-month period is

exempt.

Branch Offices

In-state Requirement

• A licensee is not required to maintain an office in the state.

License Requirement

• A licensee must notify the state when opening a branch office, but may operate multiple

branch offices under its original license.

Branch Manager

• None

Licensing Fees

Initial Application

• $800 Application Fee

Branch Application

• None

Renewal Application

• $400 Renewal Fee (Biennially)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

2000 Change

Residential Mortgage Originator

Applicant Requirements

Licensing Exemptions

Safe Harbor

• A person who is not in the business of making residential mortgage loans and who makes

no more than three such loans, with his or her own funds, during any 12-month period is

exempt.

2001 No change

Residential Mortgage Originator

Applicant Requirements

Licensing Fees

Initial Application

• $850 Application Fee

Branch Application

• None

Renewal Application

• $450 Renewal Fee (Biennially)

2002 No change

Page 82

2003 No change

2004 No change

2005 No change

2006 No change

Employee Requirements

Background Investigation

• Except with the prior written consent of the commissioner, any individual who has been

convicted of a criminal offense involving dishonesty or a breach of trust or money

laundering, or has agreed to or entered into a pretrial diversion or similar program in

connection with a prosecution for such offense, may not serve as a residential mortgage

originator or be employed in that capacity by a person licensed as a mortgage originator.

Changes with unknown effective dates

Residential Mortgage Originator

Applicant Requirements

Background Investigation

• The Department of Commerce may conduct criminal history checks and/or verify tax

identification information and for revenue recapture as authorized by Minnesota Statutes,

Chapter 270A.

Mississippi

§81-18-1 et seq.

http://www.dbcf.state.ms.us/mortgage_lending.htm

Regulation effective since: July 1, 1992

Mississippi

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Pursuant to the Mississippi Mortgage Consumer Protection Law (MMCPL), mortgage brokers

are required to obtain a license from the Department of Banking and Consumer Finance. The

MMCPL also requires that loan originators register with the department. The MMCPL has a

sunset clause and is currently effective only until July 1, 2007.

To qualify for a mortgage broker license, the applicant must designate an employee as the

“Principal Officer.” The principal officer does not need to be an owner or officer. The principal

officer must have two years of experience in mortgage lending or pass a written examination,

reside within 125 miles of the principal office location, and if the individual meets the definition

of a loan originator, then the principal officer must be registered as a loan originator. The

principal officer is required to complete continuing education hours regardless of his status as a

Page 83

loan originator. In addition, applicants are required to demonstrate fitness, maintain a bond in

the amount of $25,000, and consent to criminal background investigations.

To qualify for registration as a loan originator pursuant to the MMCPL, the applicant must

consent to a criminal background investigation and complete 12 hours of continuing education

during the licensing period. All company personnel (including owners and other officers) who

directly or indirectly solicit, place, or negotiate mortgage loans for others, or offer to solicit,

place, or negotiate mortgage loans for others must be registered as loan originators.

Mississippi has approximately 702 mortgage company licensees, 468 mortgage company branch

licensees, and 4,421 loan originator registrants (mortgage companies include both lender and

broker companies; loan originator registrants include all individuals working for either a lender

or a broker).

Mississippi

Year Status

1996 No regulation

Consumer Loan Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate financial soundness, experience, character, reputation, and

general fitness to operate honestly and in compliance with this chapter and the regulations

of the department.

Net Worth

• None

Bond

• The applicant must maintain a bond in the amount of $25,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Employees of a licensee are not required to register or obtain a license.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Insurance companies

Safe Harbor

• None

Branch Offices

In-state Requirement

• Unknown

License Requirement

• No more than one place of business may be operated under one license; however, a

licensed entity may operate multiple locations, each separately licensed.

Branch Manager

• None

Licensing Fees

Initial Application

• $300 License Fee

Branch Application

• Unknown

Renewal Application

• $300 Renewal Fee

http://www.dbcf.state.ms.us/companies.asp (November 4, 2006)

Page 84

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 No change

2000 Change

Mortgage Broker Applicant

Requirements

Experience/Examination

• The applicant or partner of a partnership, or at least one executive officer of a corporation

or limited liability corporation, or a trust must have a minimum of two years’ experience

directly in mortgage lending.

• In lieu of the experience requirement, the applicant may pass an examination covering

mortgage lending.

Fitness

• The applicant must demonstrate reasonable financial responsibility; the applicant must

have reasonable policies and procedures to receive and process customer grievances and

inquiries promptly and fairly.

Background Investigation

• The applicant, or individuals operating as a sole proprietorship that plan to conduct a

mortgage brokering or lending business in the state of Mississippi, partners in a partnership

or principal owners of a limited liability company that are or will be actively engaged in

the daily operation of a mortgage brokering or lending business in the state of Mississippi,

the chief executive officer of a corporation, or his designee, which supervises the

Mississippi location(s), any shareholders owning 25 percent or more of the outstanding

shares of the corporation that are or will be actively engaged in the daily operation of a

mortgage brokering or lending business in the state of Mississippi, and all loan originators

must submit fingerprints.

Continuing Education

• The officers and principals who are or will be actively engaged in the daily operation of a

mortgage company in the state of Mississippi and registered originators shall include

evidence of the satisfactory completion of at least 12 hours of approved continuing

education in primary and subordinated financing transactions at time of renewal.

Employee Exemptions

• Clerical employees are exempt.

• Loan originators must register with the state. An originator cannot be employed by more

than one Mississippi licensed or registered mortgage company. If the originator is working

for more than one company, the originator is considered brokering and must obtain a

residential mortgage company license.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

Licensing Fees

Initial Application

• $750 License Fee

Branch Application

• $100 License Fee

Renewal Application

• $475 Renewal Fee

• Branch Renewal Fee unknown.

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for registration as a “Loan Originator.”

Age

• None

Residency

• None

Education

• None

Page 85

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• The applicant must submit a set of fingerprints.

Continuing Education

• The registrant shall include evidence of the satisfactory completion of at least 12 hours of

approved continuing education in primary and subordinated financing transactions at time

of renewal.

License Fee

• $100 License Fee

Renewal Fee

• $50 Renewal Fee

2001 No change

2002 No change

2003 No change

2004 No change

2005 No change

2006 Change

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Experience/Examination

• The applicant’s principal officer must fulfill the experience or examination requirement.

The principal officer need only be an employee of the applicant. (See Managing Principal

details for more information.)

Continuing Education

• All controlling individuals not named the principal officer and conducting origination

activities would have to be registered as loan originators. As registered loan originators,

they would be subject to continuing education requirements.

Managing Principal

• An employee must be designated as the principal officer for a company applying for a

mortgage company license (this person is not required to be an owner or co-owner of the

company).

• This person must fulfill the experience or examination requirement (must have a minimum

of two years’ experience directly in mortgage lending or pass an examination covering

mortgage lending).

• This person must reside within 125 miles of the principal office location.

• The person must be licensed as a loan originator if his responsibilities fall within the

definition of a loan originator.

Employee Exemptions

• ALL other company personnel (including owners and other officers) who directly or

indirectly solicit, place, or negotiate mortgage loans for others, or offer to solicit, place or

negotiate mortgage loans for others, must also be registered as loan originators and would

therefore be subject to continuing education requirements.

• An originator cannot be employed by more than one Mississippi licensed or registered

mortgage company. If the originator is working for more than one company, the originator

is considered brokering and must obtain a residential mortgage company license.

Page 86

Missouri

§443.800 et seq.

http://www.missouri-finance.org/

Regulation effective since: October 12, 1994

Missouri

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The State of Missouri has regulated mortgage brokers since 1994. Pursuant to the Residential

Mortgage Brokers License Act (Act), Missouri’s Division of Finance of the Department of

Economic Development currently licenses approximately 633 mortgage brokers.

Although the

Act has no specific education or experience requirements, the division’s web site indicates that

an applicant must have lender or broker experience. Applicants are also required to maintain

both a minimum net worth and a surety bond. While the Act does not specifically require

employees of licensees to register with the division, it does require that applicants for a mortgage

broker license submit a complete list of all independent brokers and agents who are compensated

by the licensee in any manner for assistance in the performance of activities regulated by the Act.

In addition, licensees are required to file CPA audit reports within 120 days from the date of the

fiscal year end, or post an additional $100,000 bond or letter of credit in lieu of the audit.

Missouri

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• The applicant must provide an affirmation that the license applicant or the applicant’s

members, directors, or principals, as may be appropriate, are at least 18 years of age.

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant, or the members thereof, if the applicant is a partnership or association, or

the officers and directors thereof if the applicant is a corporation, must demonstrate

financial responsibility, experience, character, and general fitness.

http://www.missouri-finance.org/upload/443list_as_of_9-14-06_-_excel.xls accessed 12/10/2006.

Page 87

Net Worth

• None

Bond

• Any person who is licensed pursuant to the provisions of sections 443.800 to 443.893, if

such person is appointed or elected to any position requiring the receipt of payment,

management or use of any money belonging to a residential mortgage licensee engaged in

the activities of originating, servicing or purchasing mortgage loans or whose duties permit

such person to have access to, or custody of, any of the licensee’s money or securities or

custody of any money or securities belonging to third parties or whose duties permit such

person to regularly make entries in the books or other records of a licensee, shall before

assuming such person’s duties, maintain a surety bond in the amount of $20,000 by a

fidelity insurance company licensed to do business in the state or a letter of credit in such

amount issued by a financial institution that is insured by the Federal Deposit Insurance

Corporation.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Any person employed or contracted by the licensee to assist in the performance of the

activities regulated by sections 443.800 to 443.893 who is compensated in any manner by

only the licensee is exempt from licensing.

Licensing Exemptions

Entities

• Regulated financial institutions

• Real estate agents

• Insurance companies

Safe Harbor

• Any person who originates, services, or brokers residential mortgage loans and who

receives no compensation for those activities, subject to the director’s rules regarding the

nature and amount of compensation, is exempt.

Branch Offices

In-state Requirement

• A licensee must maintain an in-state office.

License Requirement

• A licensee must obtain approval from the state to open a branch office.

Branch Manager

• None

Licensing Fees

Initial Application

• License Fee unknown.

Branch Application

• Branch License Fee unknown.

Renewal Application

• Renewal Fee unknown (licenses must be renewed on the first anniversary date of the

issuance of the license, and every two years thereafter).

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 Change

Mortgage Broker Applicant

Requirements

Net Worth

• The applicant must maintain a net worth of $25,000.

1999 No change

2000 No change

2001 Change

Mortgage Broker Applicant

Requirements

Page 88

Bond

• The applicant must maintain a bond in the amount of $20,000.

2002 No change

2003 No change

2004 No change

2005 No change

2006 No change

Changes with unknown effective dates

Mortgage Broker Applicant

Requirements

Experience

• Although the statute and rules and regulations do not mandate a specific level of

experience, according to the division’s web site, an applicant must have prior lending or

brokering experience. Because there is no specific requirement as set out in other state

statutes, for coding purposes, a “0” was coded in the “LIC-EXP.”

Bond

• The applicant must maintain a bond in the amount of $20,000.

• Licensees are required to file CPA audit reports within 120 days from the date of the fiscal

year end, or post an additional $100,000 bond or letter of credit in lieu of the audit.

Background Investigation

• The applicant must authorize the commissioner of finance to conduct a financial and

business responsibility background check, including a check of criminal records, as may be

required. The applicant must also submit personal financial statements. (According to the

division’s web site, “Background criminal and credit investigations are required on all

directors, members, owners, partners, proprietors, and anyone else who influences the

management of the company.”)

Employee Exemptions

• Although employees are exempt, the applicant is required to list all independent brokers or

agents who are compensated in any manner for assistance in the performance of activities

regulated by the Act.

Licensing Fees

Initial Application

• $300 License Fee

• $300 Application Fee

Branch Application

• $10 Branch License Fee

Renewal Application

• $300 Renewal Fee due one year after the effective date of the license; thereafter, $600 is

due biennially.

Montana

§32-9-101 et seq.

http://banking.mt.gov/mortgage.asp

Regulation effective since: September 1, 2004

Montana

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Page 89

The State of Montana has only regulated mortgage brokering activities pursuant to the Mortgage

Broker and Loan Originator Licensing Act (Act) since 2004. Montana’s Division of Banking and

Financial Institutions administers the Act and currently licenses approximately 161 mortgage

brokers and 68 branch offices.

To obtain a mortgage broker license, individual applicants are

required to have at least three years of experience, demonstrate fitness, and obtain a $25,000

surety bond. Applicants for a mortgage broker entity license other than sole proprietorships are

required to appoint a licensed mortgage broker within the organization as the “Designated

Manager.” Entities, sole proprietors, and individual licensees are also required to obtain a

$25,000 surety bond for each location the state licenses.

In addition, the Act requires that loan originators obtain a license. To qualify for licensure as a

loan originator, individuals must have six months’ experience in a related field and successfully

complete an examination. Montana is one of only a few states that require a loan originator to

fulfill experience requirements.

Both licensed mortgage brokers and loan originators are required to complete 12 hours of

continuing education during the licensing period.

Montana

Year Status

1996 No regulation

1997 No regulation

1998 No regulation

1999 No regulation

2000 No regulation

2001 No regulation

2002 No regulation

2003 No regulation

2004 Regulation in effect

Mortgage Broker Applicant

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• The applicant must have three years of experience working as a loan originator or in a

related field. An applicant that is not a sole proprietorship shall designate to the

department a licensed mortgage broker within its organization as the designated manager

of the organization. (As a licensee, the designated manager would have to fulfill the

experience requirement.)

Education

• None

Examination

• The applicant must pass an examination. An applicant that is not a sole proprietorship

shall designate to the department a licensed mortgage broker within its organization as the

designated manager of the organization. (As a licensee, the designated manager would

have to pass an examination.)

Fitness

• None specifically stated in the statute, but the application states that all principal officers,

directors, partners, members, and persons that have a 5 percent or greater equity interest

must demonstrate “financial responsibility, character, and fitness.”

Net Worth

• None

Bond

• Each licensed location must maintain at all times an irrevocable letter of credit or surety

bond, naming the department as a beneficiary, in the amount of $25,000 for each location

identified in the application for licensure.

Background Investigation

• The applicant investigation shall include a criminal records check based on the fingerprints

of each individual applicant and a civil records check on principal officers, directors,

http://banking.mt.gov/pdf/Branch_Mortgage_9-11-2006.pdf accessed 9/16/2006.

Page 90

partners, members, and persons that have a 5 percent or greater equity interest.

Continuing Education

• An individual mortgage broker licensee must complete at least 12 hours of continuing

education during the licensing period.

Managing Principal

• An applicant that is not a sole proprietor shall designate to the department a licensed

mortgage broker within its organization as the designated manager of the organization. As

an individual licensee, the designated broker must have three years of experience and pass

an examination.

Employee Exemptions

• Clerical employees are not required to obtain a license.

• Loan originators are required to obtain a license. A loan originator may transact business

only for an employing mortgage broker who is licensed.

Licensing Exemptions

Entities

• Regulated financial institutions

Safe Harbor

• None

Branch Offices

In-state Requirement

• A person or entity licensed as a mortgage broker is required to maintain at least one

physical office located in the state either on its own accord or in conjunction with another

licensed mortgage broker or regulated lender located in the state.

License Requirement

• A licensee must obtain a branch office license for each location in the state and also obtain

a $25,000 bond for the licensed location.

Branch Manager

• None

Licensing Fees

Initial Application

• $500 License Fee for mortgage broker business entities, sole proprietors, and individuals.

Branch Application

• None

Renewal Application

• $300 Renewal Fee for mortgage broker individuals and sole proprietors. (Annually)

• $50 Renewal Fee for each mortgage broker entity other than a sole proprietor. (Annually)

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for a license as a “Loan Originator.”

Age

• None

Residency

• None

Education

• None

Experience

• The applicant must have six months’ experience in a related field.

Examination

• The applicant must pass an examination.

Fitness

• None specifically stated, but general fitness is required overall.

Net Worth

• None

Bond

• None

Background Investigation

• The applicant investigation shall include a criminal records check based on the fingerprints

of the applicant and a civil records check.

Continuing Education

• A licensee shall complete at least 12 hours of continuing education during the licensing

period.

License Fee

• $400 License Fee

Renewal Fee

• $250 Renewal Fee (Annually)

2005 No change

2006 No change

Page 91

Nebraska

§45-701 et seq.

http://www.ndbf.org/mb/index.shtml

Regulation effective since: March 1, 1990

ebraska

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The State of Nebraska has regulated mortgage brokers under the Mortgage Bankers Registration

and Licensing Act since March 1, 1990. Nebraska’s Department of Banking and Finance

(NDB&F) is responsible for licensing approximately 665 mortgage bankers (brokers and

lenders).

Nebraska’s online licensee search also indicates whether the licensee has received

any complaints. In total, the department has received 246 complaints about current licensees.

Mortgage brokers that are exempt from the Mortgage Bankers Registration and Licensing Act

may be required to register under the Loan Broker Act, Sections 45-189 to 45-191.11 of the

Nebraska Statutes. However, according to the NDB&F, if a loan broker is arranging for loans

that are secured by residential real estate, then licensing pursuant to the Mortgage Bankers

Registration and Licensing Act is necessary. If a loan broker is arranging for loans not secured

by residential real estate, they are subject to the Loan Broker Act.

To obtain a license as a mortgage banker, applicants and their control persons are required to

demonstrate fitness. Applicants applying after July 14, 2006 are required to maintain a bond in

the amount of $100,000 (mortgage bankers issued a license prior to July 14, 2006 have until

March 1, 2007 to comply with this requirement). There is no net worth requirement, but the

director may at his discretion impose a net worth requirement on a licensee if the financial

condition of the licensee warrants such a requirement or the requirement is in the public interest.

Employees of mortgage bankers are not required to register or obtain a license at this time.

Nebraska

Year Status

1996 Regulation in effect

Mortgage Banker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

http://www.ndbf.org/searches/fisearch.shtml accessed 9/16/2006.

Page 92

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant, the members thereof if the applicant is a partnership, limited liability

company, association, or other organization, and the officers, directors, and principal

employees if the applicant is a corporation must demonstrate character and general fitness.

Net Worth

• None

Bond

• The applicant must obtain a bond in the amount of $50,000.

Background Investigation

• Unknown (However, none are specifically conducted now.)

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Any individual acting solely as an employee or agent of a licensee is exempt from the

licensing requirement.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

Safe Harbor

• The term “Mortgage Banking Business” is defined as “any person who employs a

Mortgage Banker or Mortgage Bankers or who directly or indirectly makes, negotiates,

acquires, sells, arranges for, or offers to make, originate, service, negotiate, acquire, sell, or

arrange for ten or more Mortgage Loans in a calendar year for compensation or gain.”

According to the NDBF website, the “offers to” language is emphasized because it is an

important distinction. The law is designed to allow the occasional referral without

licensing. It is not designed to allow a mortgage banker or mortgage broker to open his or

her doors to Nebraska loans without a license. For instance, if you plan to launch a web

site that will accept applications from Nebraska residents, or advertise in Nebraska, or put

out the word to brokers in Nebraska that you will make loans secured by Nebraska real

property, you must have the license prior to starting any of these activities.

Branch Offices

In-state Requirement

• Unknown (However, since it is not currently required, it more than likely was not required

previously.)

License Requirement

• Unknown

Branch Manager

• None

Licensing Fees

Initial Application

• $300 License Fee

Branch Application

• Unknown

Renewal Application

• $100 Renewal Fee (Annually)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 Change

Mortgage Banker Applicant

Page 93

Requirements

Employee Exemptions

• Any individual acting solely as an employee of a licensee is exempt; any individual acting

solely as an agent of a licensee is exempt if there is a written agency contract between the

individual and the licensee that provides that, with respect to the mortgage banking

business, the individual acts exclusively for the licensee as an agent.

2000 No change

2001 No change

2002 No change

2003 Change

Mortgage Banker Applicant

Requirements

Net Worth

• The director may require a licensee to maintain a minimum net worth, proven by an audit

conducted by a certified public accountant, if the director determines that the financial

condition of the licensee warrants such a requirement or that the requirement is in the

public interest.

Bond

• The applicant must obtain a bond in the amount of $50,000.

• At any time the director may require the filing of a new or supplemental bond if he or she

determines that the bond filed under this section is exhausted or is inadequate for any

reason, including the financial condition of the licensee or the applicant for a license. The

new or supplemental bond shall not exceed $1,000,000.

2004 No change

2005 Change

Mortgage Banker Applicant

Requirements

Branch Offices

In-state Requirement

• None

License Requirement

• The licensee must notify the state when opening a branch office, but is not required to

obtain a separate license.

Branch Manager

• None

Licensing Fees

Initial Application

• $400 License Fee

Branch Application

• None

Renewal Application

• $200 Renewal Fee (Annually)

2006 Change

Mortgage Banker Applicant

Requirements

Bond

• The applicant applying for licensure after July 14, 2006 must obtain a bond in the amount

of $100,000.

• Licensees issued a valid license prior to July 14, 2006 do not need to increase the bond

amount to $100,000 until March 1, 2007.

• At any time the director may require the filing of a new or supplemental bond if he or she

determines that the bond filed under this section is exhausted or is inadequate for any

reason, including the financial condition of the licensee or the applicant for a license. The

new or supplemental bond shall not exceed $1,000,000.

Changes with unknown effective dates

Mortgage Banker Applicant

Requirements

Background Investigation

• If the applicant is a sole proprietor, the applicant must attach a copy of applicant’s current

(not more than six months old) financial statement and a copy of applicant’s résumé. The

résumé should include work experience for the past ten years.

Page 94

Nevada

§645B.010 et seq.

http://www.mld.nv.gov/

Regulation effective since: March 1, 1973

evada

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

The regulation of mortgage brokers began in 1973 in Nevada. The Financial Institutions

Division of the Nevada Department of Business and Industry is currently responsible for

ensuring compliance with Chapter 645B, a licensing statute for mortgage brokers and mortgage

agents. According to the division’s records, there are 1,073 licensed mortgage brokers in Nevada

(this includes pending applications).

Nevada’s licensing requirements rank with the most restrictive in the nation. Applicants that

wish to obtain an entity license must designate a “Qualified Employee” who fulfills all the

requirements for a mortgage broker license. A qualified employee may be a director, officer,

member, employee, manager or trustee of a partnership, corporation or limited-liability

company, or an individual designated by a sole proprietorship. The qualified employee must

reside in Nevada full-time during the designation and live within commutable distance from the

licensed location. The qualified employee must have two years of verifiable experience in

lending money for real estate or mortgages and be knowledgeable of generally accepted

accounting practices and bookkeeping procedures evidenced by verifiable experience in working

in these areas or appropriate educational training, or both. The qualified employee must also

demonstrate fitness and complete ten hours of continuing education annually. Additionally,

every owner and officer that conducts business on behalf of the licensee is required to complete

ten hours of continuing education annually.

Applicants that maintain money in trust or in escrow accounts are required to maintain a

minimum net worth that depends on the amount of money held in the accounts; net worth

minimums range from $25,000 to $250,000. Applicants that do maintain trust or escrow

accounts, however, are not required to maintain a surety bond.

http://www.mld.nv.gov/LicenseeSearch.asp accessed 9/17/2006.

Page 95

A licensee is not allowed to apply for a branch license until the principal Nevada office has been

licensed for at least six months and has been examined and found to have at least a

“satisfactory” rating. Licensees must also seek approval for a qualified employee that will

manage the branch office. In order to be approved, the commissioner must find that the qualified

employee fulfills the same requirements as above and is not in active management of another

licensed location.

Pursuant to Chapter 645B, employees and independent contractors of licensees are required to

obtain a mortgage agent license. Mortgage agents must demonstrate good reputation for

honesty, trustworthiness, integrity, and display competence to transact the business of a

mortgage agent. Licensed mortgage agents must complete ten hours of continuing education

annually. Individuals licensed as a mortgage broker and general partners, officers, or directors of

a mortgage broker licensee are not required to obtain a mortgage agent license.

Nevada

Year Status

1996 Regulation in effect

Mortgage Company Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience/Education

• The applicant must have two years of verifiable experience in lending money for real

estate or mortgages and knowledge of generally accepted accounting practices and

bookkeeping procedures evidenced by verifiable experience in working in these areas or

appropriate educational training, or both.

Note: It is unclear who this applies to in a business entity. Furthermore, it is unclear

whether this requirement was actually in effect in 1994 or whether it became effective in

2000 when the statute was amended. For coding purposes, the education or experience

requirement was coded as a “1” under “LIC-EXP.”

Examination

• None

Fitness

• The applicant and each general partner, officer, or director of the applicant if the applicant

is a partnership, corporation, or unincorporated association must demonstrate a good

reputation for honesty, trustworthiness, integrity, and display competence to transact the

business of a mortgage company.

Net Worth

• The applicant must submit financial statements.

Bond

• None

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• Employees of a licensee are not required to register or obtain a license.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Real estate agents

• Insurance companies

• Consumer loan companies

Safe Harbor

• None

Branch Offices

In-state Requirement

• It is unclear whether an in-state office was required. The statute stated, “The applicant

must state the location of the principal office and branch offices in the state.”

NOTE: For coding purposes, this was interpreted as meaning an in-state officewas

required and was coded as a “1” under “BRANCH-INSTATE”

License Requirement

• The statute indicates that a separate license was not required, but a licensee was required to

Page 96

pay a fee for additional offices.

Branch Manager

• None

Licensing Fees

Initial Application

• $1000 License Fee

• $1500 Application Fee

Branch Application

• $60 Branch License Fee

• $40 Branch Application Fee

Renewal Application

• $500 Renewal Fee (Annually)

• $100 Branch Renewal Fee (Annually)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 Change

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Net Worth

• The applicant must submit financial statements.

• If a licensee maintains any accounts described in NRS 645B.175 (relating to trust or

escrow account required for money received from investor to fund loan or trust or escrow

account required for money received from debtor to repay loan), the licensee must

maintain a minimum net worth in the following amount based upon the average monthly

balance of the accounts maintained by the mortgage broker pursuant to NRS 645B.175:

AVERAGE MONTHLY BALANCE: MINIMUM NET WORTH REQUIRED

$100,000 or less: $25,000

More than $100,000 but not more than $250,000: $50,000

More than $250,000 but not more than $500,000: $100,000

More than $500,000 but not more than $1,000,000: $200,000

More than $1,000,000: $250,000

Branch Offices

In-state Requirement

• The statutory language is still ambiguous concerning the in-state office requirement;

however, a licensee is not able to obtain a branch office license unless the “principal

Nevada office has been licensed for at least six months, and had an examination completed

resulting in a “satisfactory” rating.”

License Requirement

• If a licensee will conduct business at one or more branch offices within the state, the

licensee must apply for a license for each such branch office.

• A branch license will not be issued until the principal Nevada office has been licensed for

at least six months, and had an examination completed resulting in a “satisfactory” rating.

Branch Manager

• None

2000 Change

Mortgage Broker Applicant

Requirements

The term “Qualified Employee” means a director, officer, member, employee, manager or

trustee of a partnership, corporation or limited liability company designated by the partnership,

corporation or limited liability company pursuant to NAC 645B.055 to act on the behalf of the

partnership, corporation or limited liability company; or a person designated by a sole

proprietorship who satisfies the requirements set forth in subsection 3 of NRS 645B.020 and

NAC 645B.010 and 645B.055.

Page 97

Residency

• The applicant or the applicant’s qualified employee must reside in Nevada prior to

issuance of the license and once the license is issued continue to reside in Nevada full-time

within a commutable distance from the licensed location.

Experience/Education

• The applicant or the applicant’s qualified employee must have two years of verifiable

experience in lending money for real estate or mortgages and knowledge of generally

accepted accounting practices and bookkeeping procedures evidenced by verifiable

experience in working in these areas or appropriate educational training, or both.

Employee Exemptions

• Clerical employees are exempt.

• Mortgage agents must obtain a license. Mortgage agent is defined as, “a natural person

who is an employee or independent contractor of a licensee who is required to be licensed

pursuant to this chapter and is authorized by the licensee to engage in, on behalf of the

licensee, any activity that would require the person, if the person were not an employee or

independent contractor of the licensee, to be licensed as a mortgage broker pursuant to this

chapter. The term does not include a person who is licensed as a mortgage broker, is a

general partner, officer or director of a mortgage broker, or performs only clerical or

ministerial tasks for a mortgage broker.”

Branch Offices

Branch Manager

• An application for a branch office will not be approved unless the commissioner approves

a qualified employee to manage the branch office. The commissioner will not approve a

qualified employee to manage a branch office if the qualified employee manages or has

been designated and approved to manage another office.

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for registration as a “Mortgage Agent.”

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• A broker license may be revoked if the applicant or any general partner, officer, or director

of the applicant has, after October 1, 1999, employed or proposed to employ a person as a

mortgage agent or authorized or proposed to authorize a person to be associated with a

mortgage broker as a mortgage agent at a time when the applicant or the general partner,

officer, or director knew or, in light of all the surrounding facts and circumstances,

reasonably should have known that the person: had been convicted of, or entered a plea of

nolo contendere to, a felony or any crime involving fraud, misrepresentation, or moral

turpitude; or had a financial services license or registration suspended or revoked within

the immediately preceding ten years.

Continuing Education

• None

License Fee

• Fees are the actual costs and expenses incurred by the division to investigate the credit

history, criminal history, and background of the person.

Renewal Fee

• Unknown

2001 Change

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

The term “Qualified Employee” means a director, officer, member, employee, manager or

trustee of a partnership, corporation or limited liability company designated by the partnership,

corporation or limited liability company pursuant to NAC 645B.055 to act on the behalf of the

partnership, corporation or limited liability company; or a person designated by a sole

proprietorship who satisfies the requirements set forth in subsection 3 of NRS 645B.020 and

NAC 645B.010 and 645B.055.

Continuing Education

• Each qualified employee and/or any owner or officer conducting business on behalf of the

licensee in Nevada must complete five hours of certified courses of continuing education

during the 12 months immediately preceding the date on which the license expires.

Managing Principal

• The applicant must designate a qualified employee who meets the requirements for

licensure.

Page 98

• The qualified employee is required to complete five hours of certified courses of

continuing education during the 12 months immediately preceding the date on which the

license expires.

Branch Offices

Branch Manager

• An application for a branch office will not be approved unless the commissioner approves

a qualified employee to manage the branch office. The commissioner will not approve a

qualified employee to manage a branch office if the qualified employee manages or has

been designated and approved to manage another office.

• The qualified employee is required to complete five hours of certified courses of

continuing education during the 12 months immediately preceding the date on which the

license expires.

Employee Requirements

The term “applicant” or “registrant” refers to the following, unless otherwise noted:

• An individual applying for registration as a “Mortgage Agent.”

Continuing Education

• The registrant is required to complete five hours of certified courses of continuing

education during the 12 months immediately preceding the date on which the license

expires.

License Fee

• $125 Registration Fee and the actual costs and expenses incurred by the division to

investigate the credit history, criminal history and background of the person.

Renewal Fee

• $125 Renewal Fee (Annually)

2002 No change

2003 Change

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

The term “Qualified Employee” means a director, officer, member, employee, manager or

trustee of a partnership, corporation or limited liability company designated by the partnership,

corporation or limited liability company pursuant to NAC 645B.055 to act on the behalf of the

partnership, corporation or limited liability company; or a person designated by a sole

proprietorship who satisfies the requirements set forth in subsection 3 of NRS 645B.020 and

NAC 645B.010 and 645B.055.

Continuing Education

• Each qualified employee and/or any owner or officer conducting business on behalf of the

licensee in Nevada must complete ten hours of certified courses of continuing education

during the 12 months immediately preceding the date on which the license expires.

Managing Principal

• The applicant must designate a qualified employee who meets the requirements for

licensure.

• The qualified employee is required to complete ten hours of certified courses of continuing

education during the 12 months immediately preceding the date on which the license

expires.

Branch Offices

Branch Manager

• An application for a branch office will not be approved unless the commissioner approves

a qualified employee to manage the branch office. The commissioner will not approve a

qualified employee to manage a branch office if the qualified employee manages or has

been designated and approved to manage another office.

• The qualified employee is required to complete ten hours of certified courses of continuing

education during the 12 months immediately preceding the date on which the license

expires.

2004 Change

Employee Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for a licensee as a “Mortgage Agent.”

Fitness

• The applicant must demonstrate good reputation for honesty, trustworthiness, integrity,

and display competence to transact the business of a mortgage agent.

Background Investigation

• The applicant must submit a set of fingerprints and consent to a background check.

Continuing Education

• The licensee is required to complete ten hours of certified courses of continuing education

during the 12 months immediately preceding the date on which the license expires.

License Fee

• $185 License Fee

Page 99

Renewal Fee

• $100 Renewal Fee (Annually)

2005 No change

2006 No change

Changes with unknown effective dates

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

The term “Qualified Employee” means a director, officer, member, employee, manager or

trustee of a partnership, corporation or limited liability company designated by the partnership,

corporation or limited liability company pursuant to NAC 645B.055 to act on the behalf of the

partnership, corporation or limited liability company; or a person designated by a sole

proprietorship who satisfies the requirements set forth in subsection 3 of NRS 645B.020 and

NAC 645B.010 and 645B.055.

Background Investigation

• The applicant is required to submit:

• A financial statement dated within three months of this application and the two most

recent fiscal year end financial statements (not applicable for newly formed

companies), and/or a financial statement of any corporation that owns 25 percent or

more of the voting stock of the applicant.

• Non-Personal History Record for the company and for any corporation that owns 25

percent or more of the applicant’s voting stock.

• Personal Financial Questionnaire, Personal History Record, Child Support Statement,

and two fingerprint cards for each principal, partner, officer, trustee, and director of

the business who owns 25 percent or more of the company or plans to conduct

business on behalf of the company in Nevada.

• Qualified employees are required to submit:

• Designation of Qualified Employee Form

• Personal History Record, Child Support Statement, and two fingerprint cards

New Hampshire

§397-A:1 et seq.

http://www.state.nh.us/banking/consumer.html

Regulation effective since: January 1, 1988

ew Hampshire

996

1997

1998

1999

2000

2001

2002

2003

200

2005

006

Measure of

Restrictiveness

(0 - 16)

Page 100

Chapter 397-A of the New Hampshire Revised Statutes governs mortgage brokering activities in

New Hampshire. The Banking Department is responsible for administering and ensuring

compliance with the chapter. Currently, the Banking Department licenses approximately 432

principal offices and 93 branch offices.

The licensing statute requires that applicants provide evidence of a $20,000 bond, positive net

worth, and general fitness. In addition, the applicant must designate one employee who will be

employed full-time in a supervisory capacity at the company’s principal office and has been

actively engaged in the mortgage business in a similar supervisory capacity for a minimum of

three of the preceding five years. Branch managers must also be approved by the state and be

present in the office whenever it is open for business.

The licensing statute requires that originators employed by licensees register with the state.

Accordingly, mortgage broker applicants must provide a list of all individuals, and the address of

the work location of each such individual, who will act as originators for the licensee. The

licensee’s annual report must also include a list of all individuals, and the address of the work

location of each such individual, who act as originators for the licensee.

New Hampshire mortgage brokers are also subject to the Credit Services Regulation Act (Act),

Chapter 359-D of the New Hampshire Revised Statutes. The Act is not a licensing or

registration statute, but requires that credit services organizations maintain a surety bond or trust

account in favor of the state. The amount must equal 5 percent of the total amount of the fees

charged to buyers by the credit services organization during the preceding 12 months; however,

the bond must be no less than $5,000 and no more than $25,000.

New Hampshire

Year Status

1996 Regulation in effect

Mortgage Broker Applicant

Requirements

The term “applicant” or “licensee” refers to the following, unless otherwise noted:

• An individual applying for an individual license;

• A sole proprietor applying for a business license;

• Any other business entity, however incorporated, applying for a business license.

Age

• None

Residency

• None

Experience

• None

Education

• None

Examination

• None

Fitness

• The applicant must demonstrate financial resources, experience, personnel, and record of

past or proposed conduct.

Net Worth

• The applicant shall be required to submit to the banking department detailed financial

information sufficient for the bank commissioner to determine the applicant’s ability to

conduct the business of a mortgage banker or a mortgage broker with financial integrity.

Bond

• The applicant must obtain a bond in the amount of $20,000.

Background Investigation

• Unknown

Continuing Education

• None

Managing Principal

• None

Employee Exemptions

• If the licensee is a natural person, the license shall entitle all employees of the licensee to

engage in the business of making or brokering first mortgage loans.

• If a licensee is a person other than a natural person, the license issued to it shall entitle all

officers, directors, members, partners, trustees, and employees of the licensed corporation,

http://www.state.nh.us/banking/listbroker.pdf accessed 9/17/2006.

Page 101

partnership, entity, or trust to engage in the business of making or brokering first mortgage

loans; provided that one officer, director, member, partner, employee, or trustee of such

person shall be designated in the license as the individual to be contacted under the

provisions of this chapter.

• Independent agents under exclusive contract with a licensee are exempt unless otherwise

required to be licensed as a first mortgage broker under the provisions of the statute.

Licensing Exemptions

Entities

• Regulated financial institutions

• Lawyers

• Insurance companies

Safe Harbor

• Any natural person making not more than four mortgage loans within any period of 12

consecutive months with his own funds and for his own investment without intent to resell

the loans is exempt.

Branch Offices

In-state Requirement

• No, but no license shall be issued to any person whose principal place of business is

located outside of the state unless that person designates an agent residing within the state

for service of process.

License Requirement

• If the applicant or licensee desires to make or broker first mortgage loans in more than one

location within the state, the bank commissioner, upon favorable action on the applicant’s

principal office license, shall issue a branch office license for each location where the

business of making or brokering first mortgage loans is to be conducted.

Branch Manager

• None

Licensing Fees

Initial Application

• $250 License Fee

Branch Application

• $250 Branch License Fee

Renewal Application

• $250 Renewal Fee (Annually)

• $250 Branch Renewal Fee (Annually)

Employee Requirements

Age

• None

Residency

• None

Education

• None

Experience

• None

Examination

• None

Fitness

• None

Net Worth

• None

Bond

• None

Background Investigation

• None

Continuing Education

• None

License Fee

• None

Renewal Fee

• None

1997 No change

1998 No change

1999 No change

2000 No change

2001 No change

2002 Change

Mortgage Broker Applicant

Requirements

Employee Exemptions

• Any independent agent who enters into an exclusive contract with more than one licensee

shall not qualify for exemption from licensure. Engaging in activities governed by RSA

397-A and RSA 398-A while acting as an independent agent under two or more exclusive

contracts, shall be considered operating without a license.

• Each licensee, who has exclusive contracts with ten or more independent agents for

purposes of originating first mortgage loans in the state of New Hampshire, shall file a

copy of the language of the form contract he or she uses and copies of any subsequent

amendments made to the form contract. In addition, each licensee, who contracts with ten

or more independent agents, shall file with the department on a monthly basis a list of

independent agents with whom he or she has exclusive contracts, which shall include the

names of the independent agents, business addresses and the independent agents’ tax

identification numbers. Failure of the licensee or applicant to file the form contract or list

Page 102

of independent agents without good cause shall result in license revocation or denial.

• Each licensee who contracts with less than ten independent agents shall file with the

department, copies of the executed contracts that he or she currently holds and within 30

days of the effective date copies of each new exclusive contract with an independent agent

entered into by the licensee. In addition, each licensee shall notify the department in

writing within 30 days of the termination of any such exclusive contracts. Failure of the

licensee or applicant to file the exclusive contract or notice of termination of such an

exclusive contract without good cause shall result in license revocation or denial.

2003 Change

Mortgage Broker Applicant

Requirements

Employee Exemptions

• Employees acting as originators for a licensee must be registered with the state. Each

applicant shall provide a list of all individuals, and the address of the work location of each

such individual, who will act as originators for the licensee. The annual report shall

include a list of all individuals, and the address of the work location of each such

individual, who act as originators for the licensee.

• Any independent agent who enters into an exclusive contract as defined in Ban 2409.01(b)

with more than one licensee shall not qualify for exemption from licensure under RSA

397-A:4, VIII and RSA 398-A:10, VIII. Engaging in activities governed by RSA 397-A

and RSA 398-A while acting as an independent agent under two or more exclusive

contracts, shall be considered operating without a license and shall be deemed a violation

of RSA 397-A:3, RSA 398-A:1-a, or both.