Question:

What are the correspondent mortgage lender license requirements?

Answer:

Needless to say, anyone wiling to practice as a correspondent mortgage lender has to cover license requirements as prescribed by the law of the state they choose for practice.

Among the license requirements there are:

  • an application form to fill in,
  • a non-refundable fee, commonly worth $500 but subject to difference depending on state.

The applicant will have to present audited financial statements that they are able to maintain a verified annual net worth of $25,000 as a condition of licensure. There will also be a surety bond of some $10,000, payable to the respective state and inured to the office.

Anyone applying to become a correspondent mortgage lender will have to show evidence they exist as a registered lawful entity in the US and their primary representative has received certain hours of classroom instructions in financing (around 25).

The instruction requirement is waived / satisfied if license is being renewed and the principal representative actually has had a year of practice. It is also waived if the same person holds a mortgage broker license for this state.

It is very possible that you will be asked for fingerprints for you and any partner, officer, entity co-owner, etc. Also, the correspondent mortgage lender license will last for the remaining part of the 2-year period in which license was issued.

A limitation of the correspondent mortgage lender license is the ban to service a home loan for more than 4 months after it has been acquired. The correspondent mortgage lender license cannot be transferred, and can be cancelled if mistakenly issued. A most important requirement for obtaining a correspondent mortgage lender license is passing a written or electronic test over financing transactions, the fee for the test should not be over $100. The test is waived if the main representative holds a mortgage broker’s active license for the state.

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