Mortgage Broker Licensing

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What’s the difference between a Mortgage Loan Officer (MLO) and Mortgage Broker?

MLO’s typically work directly for a lender and their job is to help clients and potential borrowers choose the right loan options for them with that specific lender. A Mortgage Broker doesn’t lend money, but rather works on behalf of clients to find the best loan program for them at any institution. The broker’s goal is to find their clientsthe best terms, rate, and lowest closing costs to suit their needs.

Visit ASREB.com to take the next step toward becoming a Mortgage Broker today!

Our 24hr Mortgage Broker Prelicense course is approved by AZDIFI to meet the 24-hour education requirement listed under the Qualifying Individual (Responsible Individual) section of the Mortgage Broker license checklist and is required for the person listed as the qualifying individual section on the form MU1.

It is important to review the statutes (Arizona Revised Statutes Title 6, Chapter 9, Article 1) and rules (Arizona Administrative Code Title 20, Chapter 4) for Mortgage Brokers as well as the licensing documents provided by the Arizona Department of Insurance & Financial Institutions and NMLS to verify your need for the 24 hours of Mortgage Broker Education.

Licensing Reference Information:

Arizona Department of Insurance & Financial Institutions – Licensing Division:

Phone: (602) 771-2800

Email: felicensing@difi.az.gov

Website: https://difi.az.gov/industry/mortgage-industry

NMLS: https://mortgage.nationwidelicensingsystem.org/slr/Pages/DynamicLicenses.aspx?StateID=AZ

Mortgage Broker Requirements

  1. Branch Location(s) located in Arizona.

    1. At least 1 place of business must be in AZ.
  2. Designated branch manager

    1. Required for each licensed location. A branch manager can manage more that one licensed location at a time.
  3. Other Trade Name(s)

    1. DBA or Trade Name(s) to be listed in the “Other Trade Names” section of the MU1 form.
  4. Resident/Registered Agent

    1. Information currently on record with Arizona Corporation Commission
  5. Qualifying Individual (Responsible Individual)

    1. List 1 person who qualifies as the Mortgage Broker’s Responsible Individual. Qualifications include:

      1. Satisfactorily completed a 24-hour course of study approved by the superintendent during the three years immediately preceding the time of application
      2. Must be a resident of Arizona
      3. W2 Employee of the company
      4. Have not less than three years’ experience as a mortgage broker, or equivalent lending experience in a related business during the five years immediately preceding the time of becoming the new qualified Responsible Individual. (See below for detailed equivalent & experience requirements)
      5. Have passed the state Mortgage Broker test

        1. Fee: $50
        2. To register for the state exam visit AZDIFI’s website. Exams are held once a month at AZDIFI.
        3. May not be taken more than 2 times within a 12-month period.
  6. Verification of Experience for the named Responsible Individual

    1. List applicable employment history pertaining to the RI required experience. Supporting documentation will be required to determine eligibility.
  7. MU2 Individual FBI Criminal Background Check Requirements

    1. Done through NMLS
    2. Required for the following individuals: Direct Owners/Officers who hold more than 20% or more of the voting shares, top 1-3 individuals that are responsible for and provide oversight for the entity’s business activity, & the Qualifying Individual (RI)
  8. Disclosure Questions

    1. Provide an explanation for all “yes” answers & upload a copy of any applicable orders or supporting documents.
  9. Financial Statements

    1. Most current Un-Audited Financial Statements on the applicant or that of the applicants parent company, should include: Balance Sheet & Profit & Loss Statements within the preceding 6 months.
  10. Formation Document

    1. Corporate Charter or Articles of Incorporation (Corporation)
    2. Articles of Organization & Operating Agreements (LLC)
    3. Partnership Agreement (Partnership of any form)
  11. Surety Bond

    1. If investors are limited solely to Institutional Investors bond required is $10,000. Otherwise bond amount is $15,000
  12. Loan Originator Surety Bond

    1. Provide a surety bond, executed in its legal name, in the amount of $200,000 to comply with the financial responsibility of its loan originators as required by ARS § 6-991.03(B)(8)
      OR
    2. Each originator will be invoiced $100 on each initial & renewal application for deposit in the mortgage recovery fund.
  13. Record Storage

    1. For records stored on a computer or mechanical record keeping system a request must be made directly to AZDIFI Licensing.
  14. Personal Financial Statement: (Sole Proprietors Only)

    1. Use Arizona Personal Financial Statement form
  15. Documentation of Citizenship of Alien Status (Sole Proprietors Only)

    1. Sole proprietors are required to provide documentation of citizenship or alien status.
  16. Business Plan

    1. Includes: marketing strategies, products, target markets, & operating structure.
  17. Management Chart

    1. Includes: Applicants divisions, officers, managers, compliance reporting & internal audit structure.
  18. Organization Chart Description

    1. Includes: Percentage of ownership of Direct Owners & Indirect Owners as well as Subsidiaries & Affiliates of the applicant.

Equivalent and Related Experience to meet 3 years requirement under “Qualifying Individual”

  • You will need at least some experience in the lending field.
  • Acceptable experience and substitute experience is outlined in A.C.C R20-4-906

R4-4-906. Equivalent and related experience

  1. An applicant may satisfy the 3 years’ experience requirement by the types of lending-related experience listed in this subsection. The department counts each month in the following types of work experience towards the 3 years required for a mortgage broker license, or as a responsible individual. The department counts a fractional month of experience, at least 15 days long, as a full month:

    1. Mortgage broker with Arizona license, or responsible individual or branch manager for a licensee
    2. Mortgage banker with Arizona license, or responsible individual or branch manager for a licensee
    3. Loan officer, with responsibility primarily for loans secured by lien interests on real property
    4. Lender’s branch manager, with responsibility primarily for loans secured by lien interests on real property
    5. Mortgage broker with license from another state, or responsible individual for a mortgage broker licensed in another state
    6. Mortgage banker with license from another state, or responsible individual for a mortgage broker licensed in another state
    7. Attorney certified by any state as a real estate specialist
  2. An applicant with insufficient actual experience of the types listed in subsection (A) may satisfy the remainder of the 3 years’ experience requirement by the types of related experience listed in this subsection. The department counts each month in the following types of work experience according to the ratio listed below, of actual experience to equivalent experience, credited towards qualifying for a license, either or as a responsible individual. The department counts a fractional month of experience, at least 15 days long, as a full month. An applicant receives credit in only 1 area listed and for not more than 3 years’ actual experience. The remaining years of experience required to qualify for a license shall be obtained from types of work experiences listed in subsection (A).

    1. Attorney without state bar certified real estate specialty 3:2
    2. Paralegal with experience in real estate matters 3:2
    3. Loan underwriter 3:2
    4. Mortgage broker or mortgage banker from another state without license 3:2
    5. Real estate broker with an Arizona license or license from a state with substantially equivalent licensing requirements 3:2
    6. Escrow officer 3:2
    7. Trust officer, with a title company 3:2
    8. Executive, supervisor, or policy maker involved in administering or operating a mortgage-related business 3:1.5
    9. Title officer, with a title company 3:1.5
    10. Real estate broker, not qualified under subsection (B)(5) 3:1.5
    11. Loan processor, with responsibility primarily for loans secured by lien interests on real property 3:1.5
    12. Lender’s branch manager, with responsibility primarily for loans not secured by lien interests on real property 3:1.5
    13. Real property salesperson, with an Arizona license or a license from a state with substantially equivalent licensing requirements 3:1
    14. Loan officer, with responsibility primarily for loans not secured by lien interests on real estate 3:1

Licensing Fee Breakdown (all licensing fees are collected via NMLS)

Collected at the time of the application:

  • Non refundable application fee: $500
  • Prorated License fee

    Application submitted

    Fee

    License Active Through

    Jan-Mar

    $250.00

    12/31 current calendar year

    Apr-Jun

    $187.00

    12/31 current calendar year

    Jul-Sept

    $125.00

    12/31 current calendar year

    Oct

    $62.50

    12/31 current calendar year

    Nov-Dec

    $312.50

    12/31 next calendar year

  • Non-refundable NMLS Processing Fee: $100.
  • FBI Criminal Background Check Fee: $36.25 x each required authorization

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