New York Mortgage Broker Licensing

As in other states, mortgage brokers must be licensed in the State of New York before they can legally operate. The New York Department of Financial Services handles licensing in New York, which regulates all financial professionals in the state. Before an individual can become licensed, there are certain criteria they must meet.

All mortgage broker licensing, including those in New York, is completed on the Nationwide Mortgage Licensing System and Registry (NMLS). All individuals and companies that engage in the business of soliciting, processing, placing, or negotiating mortgage loans for others must obtain this license. Before doing anything else, individuals are encouraged to request an NMLS account and register it to gain access to the system.

Before working on an application in NMLS, an individual must fulfill certain obligations. New York requires all applicants to complete the 20-hour SAFE pre-licensure education course. These twenty hours include:

• 3 hours on ethics, consumer protection, fraud, and fair lending
• 2 hours on non-traditional mortgages
• 3 hours on federal regulations and lending standards
• 12 hours of undefined instruction on mortgage origination

Once the potential mortgage brokers have met the pre-licensure educational requirements, they can begin working through the elements of the NMLS application. The first step is completing the mortgage broker exam, which covers mortgage-related laws, ethics, loan origination activities, and general mortgage knowledge.

In addition to the application, the applicants must complete an MU1 form within NMLS and an MU2 form for each control person and pay the required application fees. In New York, the fee is $1,500 for investigation activities, $100 for processing, and an additional $15 for the credit report of each control person.

Additional components of the application include:

Criminal background check: At the time of application submission, the applicant must also authorize an FBI criminal history background check to be completed in NMLS.

Credit report: All mortgage broker license applicants must also authorize a credit report to be completed through NMLS and complete the Identify Verification Process. Suppose the background check includes items that negatively impact the individual’s credit report. In that case, they can submit a detailed explanation, including proof of payoffs, installment payment arrangements, and evidence of payments made.

Disclosures: Individuals must also complete disclosure questions within the mortgage broker license application.

Website questionnaire: If the individual intends to have a website for its New York operations, they are required to complete a website questionnaire and provide information about policies, procedures, and mother measures implemented to safeguard the disclosure of consumer information.

Surety Bond: Mortgage broker applicants in New York must submit a company bond for $10,000 furnished by a surety company authorized to conduct business in New York. The principal insured must match the applicant’s full legal name, and any other trade names should be included on the bond. Alternately, applicants unable to obtain a surety bond can execute a Deposit Agreement approved by the Superintendent of Financial Services of the State of New York. This document requires a pledge of securities or funds of $10,000.

Business plan: Mortgage broker license applicants must also provide a business plan that contains the following information:

• Marketing strategies
• Products offered
• Target markets
• Operating structure
• The aggregate volume of loans originated in states already licensed
• Financial projections for New York operations
• The technology used in mortgage broker activities
• Any other business activities occurring in the proposed location
• Company staffing and policies, including information on the compliance program, Fair Lending Plan, and Anti-Mondy Laundering compliance information
• Formation documents, if applicable
• Organizational and management structure charts
• A certificate of good standing issued by the New York Secretary of State
• Evidence of compliance with Workers’ Compensation laws
• Leases or subleases
• Evidence of authorization to work in the United States
• Waiver requests

The New York State Department of Financial Services may analyze the waiver requests at its discretion. This organization may consider requests for waiver of certain information. These requests often require substantial supporting documentation.

Applicants should verify that all application materials are included in the application before submitting it. If the application is incomplete, the applicant will receive a written notice identifying the items and matters that must be provided to continue reviewing the application. Suppose the additional materials are not provided within thirty days. In that case, the application will be considered withdrawn, and the applicant will have to start an entirely new application with all required documentation, fees, and information.

Obtaining your mortgage broker license in New York is a journey, with many milestones along the way. Therefore, it is often helpful to get expert guidance along the way to ensure success the first time you apply!

The Mortgage Licensing Group, Inc. is a full-service mortgage licensing firm headquartered in Southern California that is recognized throughout the industry as an experienced and reliable service provider. Established in 2006, our company has been at the forefront of the ever-changing rules and regulations, helping alleviate the often-daunting task of meeting our clientele’s diverse state licensing requirements.