What is an independent mortgage broker?

An independent mortgage broker is a licensed professional who is not employed by a single lending institution. The broker does not lend money; instead, the broker finds different lenders or mortgage loans for borrowers, who pay a loan-specific fee for the service. The fee is commonly 1% to 2% of the loan amount, and a broker may be paid by the borrower or the lender, but not both.

An independent mortgage broker operates on their own authority rather than as an employee of a lender. In California, a sole proprietor broker performing mortgage loan origination must hold a current broker license and file both a Company (MU1) form and an Individual (MU4) form through the Nationwide Multistate Licensing System (NMLS). Independent-contractor loan processors and underwriters must also hold a mortgage loan originator endorsement.

In Florida, a mortgage broker is an entity licensed under Chapter 494 of the Florida Statutes that conducts loan origination activities through one or more licensed loan originators, whether employed by the broker or working as independent contractors. Unlike a mortgage lender, a broker does not close loans in its own name or advance funds. The broker license requires a $425 nonrefundable application fee, designation of a principal loan originator, and fingerprint and credit checks for each control person.

An independent mortgage broker is a state-licensed, non-bank company that arranges mortgage loans for borrowers rather than operating as part of a federally regulated bank or credit union. In Kentucky, a mortgage loan broker is licensed by the Department of Financial Institutions, pays a $1,000 licensing fee, posts a surety bond of at least $50,000, and pays a flat $1,000 annual assessment. Its loan officers must each hold their own state registration and be covered by a surety bond.

A mortgage broker is a person who, for a fee, assists a borrower in obtaining a mortgage loan and is not named as the lender in the agreement, note, or deed of trust. An independent broker typically coordinates with multiple lenders rather than lending its own funds. The individual who takes your application or negotiates your loan terms must hold a mortgage loan originator (MLO) license regardless of the company's structure.

An independent mortgage broker is a person or company registered with the Department of Financial Services (DFS) that solicits, processes, places, or negotiates mortgage loans for borrowers across multiple lenders, rather than working for one bank as a loan officer does. New York brokers must not make loans or extend credit directly to borrowers; they place loans with licensed mortgage bankers or exempt organizations such as banks and credit unions. Brokers may also negotiate with lenders to waive application, appraisal, or origination fees.

Under Oklahoma law, a mortgage broker is an entity that, for compensation or gain, takes applications for residential mortgage loans, offers, negotiates, or modifies the terms of those loans, or services them. The license authorizes first and second mortgage brokering and lending, lead generation, loan modifications, reverse mortgage brokering and lending, short sales, and third-party loan processing. An individual who performs these activities must hold a mortgage loan originator license instead.

An independent mortgage broker is an individual who holds his or her own mortgage broker license instead of working as an employee of a brokerage. Vermont issues broker licenses to individuals as well as companies, and a mortgage loan originator operating as an individual sole proprietor must also be licensed as a lender or mortgage broker in the state. Because Vermont requires authorized individuals to be W-2 employees, a 1099 independent contractor must obtain an independent broker license to broker loans.