What is a Mortgage Broker and Lender?
Professional mortgage brokers know all the laws and rules pertaining to real estate financing. They keep up with the latest data and demographics. They know the real estate market as well as the financial markets.
Mortgage Licensing for Mortgage Brokers
Regulations Guiding Mortgage Brokers and Lenders in Select States
The procedure for becoming a mortgage broker or mortgage lender has evolved in order to protect the consumer. Professionals holding a mortgage license are real estate financing experts acting as matchmakers, putting together consumers and companies lending the mortgage money. The Mortgage Broker License indicates that the mortgage broker has the knowledge necessary to help consumers cut through the mortgage origination process.
Every state has its own requirements for licensing..
FLORIDA – All aspects of licensing for mortgage brokers and lenders in Florida is under the auspices of the Florida Department of Banking and Finance, Division of Finance in Tallahassee.
A licensed mortgage broker in Florida has to be associated with a mortgage brokerage firm that is licensed by the State of Florida. A mortgage broker can only be affiliated with one mortgage brokerage at a time. Once licensed in Florida, the mortgage broker may work with both 1st mortgages and 2nd mortgages.
- Age: 18;
- State Residency: Required
- Experience: None
- Education: 24 hours classroom instruction at an accredited institution and examination
- Continuing Education: 14 hours in 2 years; Surety Bond: $10,000; Background Check: Credit and criminal background
- Initial Application: $200 which includes the state license and examination (exam failures are subject to out of pocket expense)
- Renewal Application: $150.
CALIFORNIA - There are two separate approaches to becoming a mortgage broker, each with its own rules and responsibilities. One is under the California Department of Corporations, based on the California Finance Lenders Law (CFL). The other is under The California Department of Real Estate (DRE)
Mortgage brokers licensed under the California Department of Real Estate may perform regular broker and negotiating business with banks, savings & loans, credit unions, and thrift & loans. Mortgage Brokers licensed under the Department of Corporations may only negotiate loans with a lender licensed under the California Finance Lenders Law.
- Age: 18
- State Residency: A reciprocal state (state of residency must allow California residents to be licensed in their state.)
- Experience: 2 years as a California Real Estate Agent with a valid license; Education: Must attend an accredited institution and meet the pre-licensure requirements (8 courses) and pass the exam
- Continuing Education: Every 4 years you need 45 credit hours of approved coursework;
- Surety Bond: None for Brokers, $25,000 (California Finance Lender License), and $50,000 for a Mortgage Banker.
- Initial Application: $165 - $225 depending on license type
- Background Check: Criminal and credit. (Fingerprints are required for employees)
ILLINOIS - Mortgage Brokers in Illinois are regulated by the Illinois Bureau of Residential Finance, Division of Banking. Anyone wishing to act as a mortgage broker, mortgage banker, or loan originator is required to be licensed. They are supervised under the Residential Mortgage Broker Act.
All mortgage bankers, mortgage brokers and loan originators must pass an exam in order to be licensed. Mortgage Brokers do not have any educational requirements at this time but loan originators are required to have 6 credit hours of continuing education prior to completing the exam.
Illinois is a difficult state to get a mortgage brokers license in. The price of being licensed is more than double of most states.
- Age: 18
- State Residency: Out of state applicants must show
- Net Worth of $100,000 and least $20,000 must be in cash
- Experience: None required
- Education: None required for Broker, 6 hours for Loan Originators
- Continuing Education: None required
- Net Worth: $35,000