How do I start a mortgage brokerage business?

To start a mortgage brokerage, obtain a company mortgage broker license in each state where you will operate by filing the Company Form (MU1) through the Nationwide Multistate Licensing System and Registry (NMLS). States typically require a business plan, a qualifying individual with mortgage experience, a surety bond (for example, $10,000 in New York and $20,000 in Washington), and fingerprints plus a credit report for each control person. Startup costs commonly run $5,000 to $10,000.

California offers two tracks. The Department of Real Estate path requires a broker license: 8 college-level courses, 2 years of experience, a $150 exam fee, and a $450 license fee, plus a mortgage loan originator (MLO) endorsement for residential loans. The Department of Financial Protection and Innovation (DFPI) licenses companies under the California Financing Law ($300 in fees; $50,000 net worth for residential brokers) or the Residential Mortgage Lending Act ($1,100; $250,000 net worth; $50,000 bond). All filings go through the Nationwide Multistate Licensing System (NMLS).

Form a legal entity and file the mortgage broker license application (Form MU1) through the Nationwide Mortgage Licensing System (NMLS). Designate a principal loan originator licensed for at least 1 year or with 1 year of active mortgage-related business experience, pay the $425 nonrefundable application fee plus the $100 fee under s. 494.00172 if required, and submit fingerprints and a credit report authorization for each control person. Florida sets no net worth, bond, or audited financial statement requirement for brokers, and each branch office needs a separate $225 license.

To start a brokerage in New York, you register the company with the Department of Financial Services (DFS) as a mortgage broker through NMLS, paying a $1,500 application fee. Each applicant must have, or employ, a qualifying individual with two years of verifiable credit analysis or underwriting experience; New York-licensed attorneys and real estate brokers are exempt. After approval, you submit a $10,000 surety bond, evidence of a line of credit, and complete a conferral meeting before the certificate is issued.