Mortgage Broker Certification

Mortgage Broker Certification Information

Mortgage broker certification in the United States varies from state to state. There are multiple minimum requirements set within each state to become certified as a mortgage broker. Some of the prerequisites for becoming a certified mortgage broker include age, state residency, experience, education, exams, surety bond, net worth, background check, credit check, physical office. With these requirements come multiple applications, forms and fees which are accepted and processed by state departments and other agencies.

 

Within each state there is a local department regulating the mortgage industry. Currently, many states are beginning to cooperate with Nationwide Mortgage Licensing System (NLMS) to accept and process all forms and applications online. It's important that prospective mortgage brokers carefully review their local state laws before venturing into becoming certified.

 

As mentioned before, each state has its own requirements for obtaining mortgage broker certification. For the sake of demonstration, let's compare and contrast two states (Florida & New York) that have very different mortgage broker certification requirements.

 

In Florida, mortgage brokers and lenders are regulated by the Florida Department of Banking and Finance. The current regulations for these businesses have been in effect since July of 1992 with a recent 2007 addition of a Mandated Florida Hurricane Assessment on all Brokers and Lenders collected through their Surety Bond Premium. Since 2002, there has been rapid growth of mortgage brokers in the state, with an estimate of over 60,000 licensed brokers working today, that's double the figure since 2002.

 

The current regulation of Florida affect anyone who solicits mortgage loans on behalf of someone borrowing, who accepts an application for a mortgage loan, or who negotiates the terms and conditions of a mortgage loan for a lender of the money. All Mortgage Brokers must be an associate of a Mortgage Broker Business that is also licensed by the State of Florida. However, a Mortgage Broker may only be an associate of one Mortgage Brokerage in Florida. Once licensed in Florida, the Mortgage Broker may work with both 1st mortgages and 2nd mortgages.

 

In Florida, the minimum age for becoming a mortgage broker is eighteen with no minimum experience required. However, the state requires rigorous education of at least 24 hours classroom instruction at an accredited institution and 14 hours of continuing education. The educational requirement includes a written examination that reflects a strong knowledge of the Florida Mortgage Brokerage and Lending Act, the Florida Fair Lending Act, the Patriot Act, all federal lending and housing regulations, complete knowledge of FHA/VA and Conventional mortgages, Fannie Mae underwriting guidelines and closing procedures, basic real estate knowledge such as surveys and deeds, plus mathematical calculations pertaining to financing. From there, potential mortgage brokers must submit multiple forms and pay fees for the certification process.

 

Now let's look at New York State mortgage broker certification requirements. The minimum age is eighteen and minimum experience is two years in the mortgage industry or similar. There has been no education or continuing education required nor any exams. However, recently New York State introduced a new policy requiring mortgage brokers to take at least 18 hours of courses, with additional hours as part of continuing education. New York State has other rigorous guidelines for obtaining mortgage broker certification.

 

Mortgage Broker industry in the state of New York is regulated by the State of New York Banking Department. This is tough state to get licensed in only due to the large amount of requirements set in place. Foreign (out of state) companies may have a little difficulty getting licensed in New York. They need to obtain permission from the secretary of state prior to submitting an application for licensure. New York has transitioned to the Nationwide Mortgage Licensing System (NMLS), which accepts and processes all forms online.

 

Mortgage brokers in New York must undergo background checks and credit checks and must have surety bond requirement of $10,000 up to $100,000 depending on the number of loans that will be handled annually. There are multiple applications that must be submitted and fees to be paid for the certification process.

 

Not all states require exams for mortgage broker certification. However, the National Association of Mortgage Brokers (NAMB) offers several certification exams that can boost a mortgage broker's credential and knowledge in the industry. These exams are optional complementary exams to the some of the required state tests for mortgage brokers.

 

The General Mortgage Associate certification exam is open to new mortgage brokers and is known as entry-level credential for individuals who want to demonstrate the minimum level of knowledge in the industry.

 

 The Certified Residential Mortgage Specialist exam is a mid-level credential for brokers who want to commit to higher standards of professional practice.

 

Certified Mortgage Consultant is the most advanced credential for mortgage professionals who want to demonstrate the highest level of professionalism.