Mortgage Broker Requirements

REQUIREMENTS FOR MORTGAGE BROKER

  The 79th Legislative Session passed two bills that modified the Mortgage Broker License Act (MBLA):  House Bill 955 and Senate Bill 988.  The following information pertains to an application received by the department for an initial license or the renewing of a license on or after 9/1/2005:

• Fee Increase—The current licensing fee schedule has been increased to provide additional funding necessary to support the agency’s expanded consumer complaint, enforcement, and examination efforts.  The new fee schedule is:

Mortgage Broker                                                      Loan Officer

$375 Application Fee                                                   $175 Application Fee

    20 Recovery Fund                                                      20 Recovery Fund

    39 Background Check (new applicants only)                  39 Background Check (new applicants only)

• CE Hours Increase for New Applicants—The current requirement for a loan officer applicant needing a 15-hour core (pre-licensing) course in lieu of 18 months of loan origination experience has been expanded to 28 hours of core course training and 2 hours of ethics training. 

• CE Hours Redefined for Renewing Licensees—The current requirement of needing 15 hours of continuing education for renewing licensees has not changed but the breakdown of the hours required has been established as:

8 hours of Core (including 2 hours of Ethics)

7 hours of either CE or Core

• Financial Requirements Modified—In completing the Personal Financial Statement, assets that are exempt under federal and state law can no longer be used to determine overall net assets.  You may no longer include in your Personal Financial Statement the following:  real estate used as primary residence; home furnishings; business tools, equipment, and farming implements; jewelry; recreational vehicles and watercraft; retirement plans; college savings plans; etc.  Additional information may be found by reviewing Chapters 41 and 42 of the Texas Property Code. 

• Expired License—A person whose license has expired for 91 days or more may not renew the license.  The person may obtain a new license by complying with the requirements and procedures for obtaining an original license.  The penalty fee for renewing an expired license within the 90 day period is an additional $187.50 for a mortgage broker and $87.50 for a loan officer.

• Appeal of a Licensing Decision—If an applicant wishes to appeal a licensing decision (for example, an applicant is denied a license or the renewing of a license), the applicant must pay a deposit for the hearing costs, not to exceed $500.  The deposit will be collected at the time an appeal is filed with the department and will be refunded in full if the applicant prevails, or any remaining balance minus the actual court costs if the department prevails.

Sec.A156.204.AAQUALIFICATIONS.AA(a)AATo be eligible to be

licensed as a mortgage broker a person must:

(1)AAbe an individual who is at least 18 years of age;

(2)AAbe a citizen of the United States or a lawfully

admitted alien;

(3)AAmaintain a physical office in this state and

designate that office in the application;

(4)AAprovide the commissioner with satisfactory

evidence that the applicant satisfies one of the following:

(A)AAthe person has received a bachelor’s degree

in an area relating to finance, banking, or business administration

from an accredited college or university and has 18 months of

experience in the mortgage or lending field as evidenced by

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documentary proof of full-time employment as a mortgage broker or

loan officer with a mortgage broker or a person exempt under Section

156.202;

(B)AAthe person is licensed in this state as:

(i)AAan active real estate broker under

Chapter 1101, Occupations Code;

(ii)AAan active attorney; or

(iii)AAa local recording agent or insurance

solicitor or agent for a legal reserve life insurance company under

Chapter 21, Insurance Code, or holds an equivalent license under

Chapter 21, Insurance Code; or

(C)AAthe person has three years of experience in

the mortgage lending field as evidenced by documentary proof of

full-time employment as a loan officer with a mortgage broker or a

person exempt under Section 156.202;

Text of subsec. (a)(5) as amended by Acts 2003, 78th Leg., ch. 170,

Sec. 1

(5)AAdemonstrate evidence of compliance with the

financial requirements of this chapter;

Text of subsec. (a)(5) as amended by Acts 2003, 78th Leg., ch. 171,

Sec. 1

(5)AAprovide the commissioner with satisfactory

evidence of:

(A)AAhaving passed an examination, offered by a

testing service or company approved by the finance commission, that

demonstrates knowledge of:

(i)AAthe mortgage industry; and

(ii)AAthe role and responsibilities of a

mortgage broker; and

(B)AAcompliance with the financial requirements

of this chapter; and

Text of subsec. (a)(6) as amended by Acts 2003, 78th Leg., ch. 170,

Sec. 1

(6)AAnot have been convicted of a criminal offense that

the commissioner determines directly relates to the occupation of a

mortgage broker as provided by Chapter 53, Occupations Code;

Text of subsec. (a)(6) as amended by Acts 2003, 78th Leg., ch. 171,

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Sec. 1

(6)AAnot have been convicted of a criminal offense that

the commissioner determines directly relates to the occupation of a

mortgage broker under Chapter 53, Occupations Code.

(7)AAsatisfy the commissioner as to the individual’s

good moral character, including the individual’s honesty,

trustworthiness, and integrity; and

(8)AAnot be in violation of this chapter, a rule adopted

under this chapter, or any order previously issued to the

individual by the commissioner.

(b)AAA mortgage broker may conduct business under a corporate

structure, partnership, or any other business form or as an

independent contractor for a corporation, partnership, or any other

business entity. Before conducting mortgage broker activities

under, through, or for a corporation, partnership, or other

business entity, a mortgage broker must notify the commissioner, in

writing, of any corporate name, partnership name, assumed name, or

any other name under, through, or for which the mortgage broker

conducts activities for which a license is required under this

chapter. The corporation, partnership, or other business entity

under, through, or for which the mortgage broker conducts business

is not required to be separately licensed as a mortgage broker

provided that all individuals who perform mortgage broker

activities are licensed as mortgage brokers or loan officers. The

commissioner shall require proof of compliance with this subsection

at the time the mortgage broker applies for and renews a license.