The Pre-Licensing Process

How do I get a license as a Mortgage Broker?

You will have to meet STRICT qualification requirements for experience, financial, and education hours.  The laws were recently revised by the Texas Legislature.  These requirements became effective September 1, 2007.  For expanded, specific information, please refer to the SML website for guidance.

Everyone is required to pass the state exam and acquire pre-license education for mortgage brokers.  Then, you will submit a license application to the Texas Savings & Mortgage Lending Department (SMLD) without the fingerprint card.  This is now done during the processing of the application (see below). 

Experience Requirements:

· Have a bachelors degree from a 4 year accredited college or university in business, AND 18 months experience as a full-time mortgage broker or licensed loan officer with a licensed, sponsoring mortgage broker or a mortgage bank

· 36 months of experience with full-time employment as a licensed loan officer with a licensed, sponsoring mortgage broker or a mortgage bank

OR

· Holds active Texas license as:

· Real Estate Broker or

· Attorney or

· General Lines Agent (Life, Accident, Health, & HMO; or Property & Casualty); Limited Lines Agent (Multiple Lines); or Managing General Agent

Financial Requirements:

Mortgage brokers must demonstrate that they continue to maintain either:

· Personal net worth of at least $25,000, or

· Personal surety bond valued at least $50,000. 

       (A surety bond in the company’s name will NOT be accepted to fulfill this requirement.) 

 

Use of Exempt Assets:  A statutory change in 2005 eliminated the use of items exempt under the Texas Property Code from being counted as assets on your Personal Financial Statement.  For example, a primary residence cannot be listed as an asset, nor will the outstanding mortgage amount be counted as a liability against you. 

 

Additional items that are exempt include:  lots used for burial of the dead; home furnishings; business tools, equipment and farming implements; two-, three-, or four-wheeled vehicles up to the number of licensed drivers in the family; jewelry; sporting equipment (including bicycles); certain animals; individual retirement plans and pensions (excluding Roth IRAs); payments from stock bonus, pension, profit-sharing or similar plans including annuity or similar contracts; and college savings plans.  More specific information may be found by reviewing Chapters 41 and 42 of the Texas Property Code at http://tlo2.tlc.state.tx.us/statutes/statutes.html. 

Education Requirements:

The requirements for education hours have become much more strict.  The loophole to opt-out by experience has closed. 

Almost EVERYONE getting a broker license will require education!  

 

 

 

 

 

 

 

 

 

 

 

*NEW*  Does my company need a license?

Unless the company operates as a sole proprietorship, the company must be licensed effective 1/1/2008.  The company must designate a representative that is a licensed mortgage broker and pay a processing fee of $175. 

 

Any branch under the company mortgage broker structure must be licensed the same as a individual mortgage broker which must be submitted on the appropriate form with the $50 per branch processing fee.  Any changes to the designated representative must be submitted to the department immediately upon change along with a $25 processing fee.

 

The application form can be downloaded here.   GET YOUR APPLICATION IN BEFORE JAN 1!!!

 

 

Where do I get the TX Mortgage Broker Surety Bond for $50,000?

The Texas Department of Insurance keeps a list of approved companies and agents who can provide a surety bond.  The list is available on their website at:  www.tdi.state.tx.us/company/pcbondsurety.html. 

 

Shop around for the best deal.  The better your personal financial situation, the better the price will be. 

 

Also, it is statutory that the bond be issued for a two-year period that coincides with the term of your broker’s license; therefore it is the department’s policy that the bond must be paid up front for the two-year period.  If you use the bond to fulfill your financial requirement, the original bond must be provided to the department before a license can be issued. 

 

We have a couple of companies that we can recommend.  See this Rutledge Report article.

 

Are your courses approved by the State of Texas?

Yes, our courses are approved by the Texas Department of Savings and Mortgage Lending, Texas Real Estate Commission for MCE Credit, State Board of Accountancy for CPE Credit, Texas State Bar for MCLE Credit.

 

Okay, I meet the requirements, now what???

Do I qualify for a Mortgage Broker license?