Educational Requirements

• Educational requirements are required for mortgage brokers and mortgage loan originators who are not employed by federal banking institutions. Mortgage loan originators must obtain 20 hours of pre-licensing education to comply with the national SAFE Act. Some states may require additional coursework; check your state requirements for details. You will need to successfully pass the SAFE MLO exam before receiving your mortgage broker's license. Most states require eight hours or more of continuing education prior to renewing a broker's license.
  
  

Financial Requirements

• Most states have established financial requirements that mortgage brokers must verify prior to licensing. Depending on your state, audited financial statements from a certified public accountant may be required. However, some states will accept unaudited financial statements to satisfy the minimum net worth requirements for mortgage brokers. Your state may also require a surety bond that will be used to compensate consumers, if you fail to perform as promised or if your company used fraudulent practices to originate mortgage loans.
  
  

Background Checks

• Background checks are required for mortgage brokers to obtain a state-issued license. You will need to be fingerprinted (see Resources) and undergo an FBI criminal background check. The National Mortgage Licensing System will require your permission to obtain a copy of your credit report. Criminal background checks and credit checks are requirements of the SAFE Act. Background checks are conducted to help ensure that consumers obtain assistance from individuals who have demonstrated favorable ethical standards.
  
  

Licensing

• Licensing requirements are established and enforced at the state level. The licensing process allows local governments to monitor and regulate independent mortgage brokers, while providing consumers with more assurance of a company's validity. Your state's Division of Financial Regulation or Department of Banking will issue your license after you have met all of the approval conditions. Prior to receiving your mortgage broker's license, you will need to remit the applicable licensing fees. Most states require you to renew your mortgage broker's license every one to two years.