Become a Mortgage Broker in Colorado

Mortgage brokers act as middlemen between borrowers and lending institutions, working with clients to determine which mortgage products best suit their needs. In order to work as a mortgage broker in Colorado, you must obtain the proper license, which involves an application, pre-licensing training and testing, a background check, and continuing education. Once you are licensed, you can work for a mortgage brokerage firm or you can start your own company.

Steps

Getting Licensed

1. Get your first background check. In order to begin the license application process, you must submit a set of fingerprints to the Colorado Bureau of Investigation (CBI) for a background check. You can consult the Colorado Department of Regulatory Authorities' website to find a fingerprinting location near you.
   • If you have a criminal record or you have had a professional license revoked in the past, you can request a preliminary advisory opinion from the NMLS. This will give you a good idea of whether or not you are eligible for a license before you pay the associated fees to apply.
2. Register with NMLS. Create an account on the National Multistate Licensing System and Registry (NMLS) website and begin filling out the application for a mortgage loan originator license. Your employer can create the account on your behalf, or you can request your own account.
   • Be prepared to enter information about your personal and occupational history on this application.
3. Get your second background check. Even though you have already been fingerprinted for a background check by the CBI, you must now have a background check performed by the NMLS. You can schedule an appointment to be fingerprinted on their website.
   • You may be able to submit a copy of the fingerprints that you already had taken, depending on how they were scanned.
   • The cost for fingerprinting is $36.25 for electronic scanning and $46.25 for paper printing.
4. Fulfill the educational requirements. In order to be approved for a license, you must complete 20 hours of pre-licensing training through an organization approved by the NMLS.
   • The training includes three hours on federal law and regulations, three hours on ethics, two hours on nontraditional mortgage products, and twelve hours of elective courses.
   • Beginning on March 1, 2016, Colorado will also require two hours of training on state-specific regulations, which can be covered by one of the required elective courses.
   • The NMLS has approved many different educational institutions to offer these classes, so you can choose whichever one is most convenient for you. Depending on your schedule, you can choose to take each class individually or you can take longer classes that fulfill multiple requirements.
   • Keep in mind that the training must take place no more than three years prior to the submission of your application, so if you took the courses more than three years ago, you will have to retake them.
5. Pass your exams. After you have completed the training programs, you must pass a two-part S.A.F.E Mortgage Loan Originator Exam, administered by the NMLS.
   • In order to do well on the tests, you will need to be able to answer questions about the roles of the various regulatory agencies, state and federal laws that govern mortgage loan origination, the regulations you must abide by as a mortgage broker, and disciplinary measure for noncompliance.
   • In order to register for these tests, you will need to provide proof that you completed the necessary training.
   • You must answer at least 75% of the questions correctly in order to pass the exams.
6. Purchase a surety bond. A surety bond is a written agreement similar to a specialized insurance policy whereby financial compensation is made in the event that the principal fails in their duties. These bonds are available from private companies.
   • For an individual, the surety bond must be in the amount of $25,000. If you work for a company, you may be able to be covered by their surety bond, depending on the size of the company and the amount of their coverage.
7. Obtain errors and omissions insurance. Colorado also requires all mortgage brokers to hold insurance policies that offer protection in the event that you are deemed responsible for complaints regarding a service you provided or failed to provide.
   • Make sure your policy meets the state required minimum levels of $100,000/claim and $300,000 AALL (Annual Aggregate Limit of Liability).
   • Just as with the surety bond, you may be able to operate under your employer's insurance policy, depending on the number of employees and the amount of coverage.
8. Complete your application. Once you have fulfilled all of the requirements, you must complete your application for a mortgage loan originator license on the Division of Real Estate's website. When your application is approved, you will receive your new license number.
   • Once you are notified that your application has been approved, call the Division of Real Estate to get your NMLS online record updated with your new license number.

Staying Licensed

1. Stay on top of continuing education requirements. In order to renew your license, you will need to complete at least eight hours of continuing education courses approved by the NMLS each year. You will also need to take a two-hour state-specific course issued by the Colorado Division of Real Estate each year.
   • Be sure to submit evidence of course completion to the Division of Real Estate.
   • Keep in mind that you cannot repeat the same classes that you took to earn your initial license.
2. Renew your license. In order 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 do not renew your license in a timely manner, you have two months to reinstate it. If you fail to reinstate your license during that time period, you will have to reapply for a license in order to work as a mortgage broker in Colorado.
3. Follow the law. As a mortgage broker, you will be legally required to interview your clients regarding their financial situations and to suggest appropriate mortgage products based on that information. You are also required to completely disclose all of the costs associated with the mortgage.
   • There are a variety of other regulations by which you must abide, and you will learn the full details during your required training courses. If you fail to abide by any state or federal laws, you may have your license revoked and/or you may be required to pay fines and restitution.

Tips

• If you haven't yet met all of the requirements to get your mortgage broker license, you may still be able to work as a mortgage broker for 120 days under a temporary license. In order to qualify, you must work under and be sponsored by a licensed mortgage broker. You also must pass your background check for the CBI, acquire a surety bond and an errors and omissions insurance policy, and complete the application on the Division of Real Estate's website.
• Once you become a mortgage broker, you can work for a company or you can start your own company. Keep in mind that each company you apply to may have different requirements for education and experience.

References

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