11 Steps How To Become A Mortgage Broker In Colorado

(doylc.com) How To Become A Mortgage Broker In Colorado - Mortgage brokers act as intermediaries between borrowers and lenders, working with customers to determine which mortgage products best meet their needs. To work as a mortgage broker in Colorado, you must obtain the proper license, which includes an application, pre-licensing training and exam, background check, and continuing education. Once licensed, you can work for a mortgage brokerage firm or start your own business.

• How To Getting Licensed

1. Get your first background check. To begin the license application process, you must provide the Colorado Bureau of Investigation (CBI) with a set of fingerprints for a background check. Visit the Colorado Department of Regulatory Authorities website to find a fingerprint location near you.

If you have a criminal record or have been disbarred in the past, you can request a preliminary report from the NMLS. This gives you a good idea of ​​whether or not you qualify for a license before paying the associated application fees.

2. Register with NMLS. Create an account on the National Multistate Licensing System and Registry (NMLS) website and begin completing the Mortgage Lender License Application. Your employer can create the account on your behalf, or you can apply for your own account.

Be prepared to include information about your personal and professional history in this application.

3. Get your second background check. Even if you have already been fingerprinted for a background check by the CBI, you must now undergo a background check by the NMLS. You can make an appointment for fingerprinting on their website.

Depending on how they were scanned, you may be able to submit a copy of the fingerprints you have already taken.

The cost of fingerprinting is $36.25 for electronic scanning and $46.25 for paper printing.

4. Meet educational requirements. To be eligible for a license, you must complete 20 hours of pre-licensing training through an NMLS-approved organization.

The training includes three hours on federal laws and regulations, three hours on ethics, two hours on non-traditional mortgage products, and twelve hours of elective courses.

Beginning March 1, 2016, Colorado will also require a two-hour state-specific regulation training course, which may be covered by one of the required elective courses.

The NMLS has approved many different educational institutions to offer these courses so you can choose the one that is most suitable for you. Depending on your schedule, you can take each course individually or you can take longer courses that meet multiple requirements.

Note that the training must not take place more than three years before submitting your application. So if you took the courses more than three years ago, you will have to repeat them.

5. Pass your exams. After completing the training programs, you must pass a two-part SAFE Mortgage Loan Originator exam administered by the NMLS.

To do well on the tests, you must be able to answer questions about the roles of the various regulatory agencies, the state and federal laws that govern mortgage origination, the regulations you must comply with as a mortgage broker, and disciplinary actions measure of non-compliance.

To register for these tests, you must provide proof that you have completed the required training.

You must answer at least 75% of the questions correctly to pass the exams.

6. Purchase a guarantee. A surety bond is a written agreement, similar to a specialized insurance policy, that provides financial compensation in the event that the client fails to meet their obligations. These bonds are available from private companies.

For an individual, the surety bond must be $25,000. If you work for a company, depending on the size of the company and the level of coverage, you may be able to be covered by their guarantee.

7. Take out error and omission insurance. Colorado also requires all mortgage brokers to have insurance policies that provide protection if you are held responsible for complaints related to a service you provide or fail to provide.

Make sure your policy meets the federally mandated minimum limits of $100,000/claim and $300,000 AALL (Annual Aggregate Limit of Liability).

Just like sponsorship, you can act under your employer's insurance policy depending on the number of employees and the amount of coverage.

8. Complete your application. Once you have met all the requirements, you must complete your Mortgage Lender License Application on the Real Estate Department's website. If your application is approved, you will receive your new license number.

Once you are notified that your application has been approved, call the Real Estate Department to update your NMLS online record with your new license number.

• How To Stay Licensed

9. Stay up to date on continuing education requirements. To renew your license, you must complete at least eight hours of NMLS-approved continuing education courses each year. They are also required to take a two-hour state-specific course issued by the Colorado Division of Real Estate each year.

Be sure to submit proof of course completion to the Real Estate Department.

Remember that you cannot repeat the same courses that you took to earn your original license.

10. Renew your license. To remain a licensed mortgage broker in the state of Colorado, you must renew your license annually with both the Colorado Division of Real Estate and the NMLS.

If you don't renew your license on time, you have two months to recover it. If you do not reinstate your license during this period, you must reapply for a license to practice as a mortgage broker in Colorado.

11. Follow the law As a mortgage broker, you are required by law to ask your customers about their financial situation and, based on this information, to propose suitable mortgage products. You must also fully disclose all costs associated with the mortgage.

There are a host of other regulations that you must comply with and you will learn the full details during your required training. Failure to comply with state or federal law may result in your license being revoked and/or fines and refunds.