The first step is licensing. It is important to understand the state and federal requirements, including locating the specific type of state license you need, searching for your licensing requirements in NMLS, and determining the requirements set forth by your state.
The next steps is to register your mortgage brokerage as a legal entity. The process of registering your brokerage as a legal entity includes selecting a business name, choosing a location for your business, determining the appropriate business structure, and registering your business with federal, state, and local agencies. Additionally, you will need to obtain federal and state tax ID numbers and apply for any necessary licenses and permits.
One of the most prevalent licensing requirements for mortgage brokers is compliance and insurance. Obtaining a surety bond is a common requirement for most states. This bond not only provides additional protection for clients but also assures that brokers will adhere to the industry's governing standards. To comply with state and federal regulations, it is important to prepare for state audits, compile quarterly call reports, and comprehend the employee requirements.
Select your systems for your business operations, including LOS/POS/CRM, and credit provider. Technology selected should assist in every step of loan origination, including taking applications, collecting necessary documents, and simplifying the entire loan process.
The final step is the connect with lender partners. Brokerages should seek lending partners that have equitable business practices and provide loan programs that cater to their target market.
Checklist steps to become a mortgage broker.