Mortgage Company Formation & Setup

After the housing crisis in 2008, the mortgage industry has gone through many changes. While many claimed the crash would mean the end of the mortgage industry, it provided an opportunity for the best mortgage brokers to adapt by selling better products and delivering outstanding service. More than just obtaining your own mortgage license is necessary to start your own mortgage business. You must send all the required documents to the Nationwide Mortgage Licensing System (NMLS).


Establish a Legal Entity for Your Company

You must first create a business entity before registering with the NMLS. Because business names cannot compete, search the business listing to make sure you’ve selected a unique name. After you’ve completed the registration, go to the IRS website to get a tax ID number. Move on to applying for your NMLS once you have these.


Application for NMLS Membership

Individuals and businesses should register with the NMLS to access mortgage processing services. Even though this is a federal mandate, it is overseen by the states. Fees in your state can be identified by contacting the NMLS regulatory department. If you already possess an individual license, be sure it’s not with a federally controlled entity like a bank.

This designation has its own set of criteria, and you may be required to perform additional training or documentation if you have it. You must pass the mandatory NMLS exam to obtain your individual license.


Forms Must Be Filled Out and Documentation Must Be Provided

Fill out Form MU1 and submit it. All new organizations must submit this application. It contains basic business information as well as the company’s financial history and the officers’ names. To avoid rejection or delays, fill out this form thoroughly. Please include any additional documentation that is needed. Conduct a history and credit investigation.

If you want to work as a mortgage loan originator, you’ll need to provide further financial documents during the application process. Many mortgage firms are not loan originators but rather brokers who work out the best offer for their customers.


Bonds and Insurance

The National Multiple Listing Service needs a surety bond. This bond is an insurance policy that offers only minimum coverage. A bond ranging from $25,000 to $75,000 is required, depending on your state. If a customer suffers a loss due to your operation, the bond compensates them and the bond company reclaims the money from you.

It’s a bright idea to have other insurance plans as well. A general liability policy and building insurance are required for any office room. While this policy is mandated by leases and is a good idea, it will not shield you from client litigation if your company makes a mistake. You’ll need professional liability protection for this.


Basic Business Logistics in the Mortgage Industry

While this may be a strategic advantage to draw clients who want to sit down and evaluate their personal financial conditions, many mortgage brokers perform most of their business online. They are abandoning physical locations in favor of virtual ones. Set up a fast and efficient form of contact with customers, whether or not you have physical space.

Develop relationships with loan underwriters at mortgage lenders. Have a network of lenders and banks that fund loans, refinances and equity lines of credit in collaboration with brokers.


Employ Qualified Personnel

Decide how many mortgage brokers you’ll employ and how much they’ll be paid. The majority of mortgage brokers work on a salary-plus-commission or a commission basis. Select a program that will attract and inspire workers.


Promote Your Business

Create a company phone number and website as well as business cards. Start networking with local real estate agents to form powerful alliances.


Real Estate Attorney Near Me

Our team has extensive knowledge and has worked with clients in all areas of real estate. We work hard to achieve ideal results for our clients by considering their goals and conducting a thorough and objective analysis of the most effective way to achieve them.

Attorneys Real Estate Group will help you with any issue relating to the establishment of a mortgage company. Feel free to contact us via our website or by phone at
(800) 481-4049; we look forward to assisting you.