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The Biggest Challenges You Will Face with Multi-State Mortgage Licensing

mortgage licensing challengesDid you know that the number of state-licensed mortgage companies grew by 6.7% in 2017?

This number might seem small but compared to the 3.8% growth in mortgage companies, it’s significant. More companies are going for multi-state mortgage licensing to keep up with the market.

It could be the right call if you want to take your company to the next level.

Be prepared by knowing the biggest challenges you could face. Read on to learn more.

The Growth in Multi-State Mortgage Licensing

According to the National Multistate Licensing System (NMLS), the number of companies holding licenses in more than 20 states grew by 8% in 2017. This number is high considering how complicated getting multi-state mortgage licensing can be.

When it comes to mortgage companies, the licensing process is more complex than for mortgage loan officers. However, multi-state mortgage licensing comes with its rewards and is the best way to keep up with the market.

Where to Start

When you consider getting mortgage licensing for your company in multiple states, first take into account where your business is. Is it in southern states? Or is there a boom in real estate in California? Asking yourself questions like these will point you in the right direction of what state licenses to look into.

This research is vital because every state has their own requirements, licenses, and costs. For example, Texas offers 4 types of mortgage company licenses while Florida offers 3 company licenses.

What Type of Licenses Does Your Company Need?

The key when it comes to knowing what licenses you need to operate your mortgage business is defining what type of activity and services you will provide your clients. The question is: Which license?

In Texas, it depends on the type of business you’re conducting. For example, if your entity is wholly or partly owned by a credit union, you’ll have to apply for a Credit Union Subsidiary Organization License. Instead, if you’re an independent contractor receiving compensation for individual services as a loan processor or underwriter, you’ll need to apply for an Independent Contractor Loan Processor and Underwriter Company License.

Which Regulatory Agencies Will Manage Your Licenses?

In many states, mortgage licenses are regulated by several agencies. In California, the licenses are overseen by the California Department of Business Oversight (CA-DBO) and California Bureau of Real Estate (CA-BRE). Every state is different so do your homework and understand what is required.

Are These Licenses Worth It?

When it comes to costs, every state has their own fees. In Washington, getting your mortgage company licenses can cost up to $5000. In California, you can pay just over $1200.

Getting mortgage licenses in several states will come down to more than costs. It’s worth your while but only if you do your research and get the licenses that will bring you enough clients to justify the effort and costs.

Wrapping It Up

The most important thing in multi-state licensing is analyzing if this is the right approach to take your business to the next level.

Want to get your mortgage company licensed in multiple states?

Contact us to get started today.

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 on the forefront of the ever-changing rules and regulations, helping alleviate the often daunting task of meeting the diverse state licensing requirements for our clientele.