Saturday, August 30, 2008

Mortgage Broker Requirements

Our recent post reviewed what the FBI classifies as mortgage fraud. In another post we looked at what NJ was doing to prevent mortgage fraud.

After reviewing the issues in Florida regarding the ease in which anyone, absolutely anyone, could become a mortgage broker it is interesting to see the different requirements throughout various states. The easier entrance to the field is the easier it can be for criminals to become involved.

Thomas Law has compiled a list of requirements for all the states. These requirements are just for brokers. Lets take a look at the varying requirements -


Florida - Key Requirements:
  • $200 filing fee
  • Evidence of Education
  • Fingerprint Cards and Fees
  • Florida Exam
Illinois - Key Requirements:
  • $1500 filing fee
  • $20,000 Surety Bond
  • $100,000 Fidelity Bond
  • IL Loan Officer Exam
  • Additional $1200 filing fee upon approval
Massachusetts - Key Requirements
  • $115 filing fee
  • References
  • Credit Reports
New Jersey - Key Requirements:
  • $2,100 filing fee
  • $100,000 Surety Bond
  • Physical Office
  • Audited Financials
  • Evidence Education
  • Fingerprint Cards and Fees
Nevada - Key Requirements:
  • $1500 filing fee
  • Physical Office
  • Fingerprint Cards
  • Qualified Employee
  • Company Financials
South Dakota - Key Requirements:
  • $365 filing fee
  • Registered Agent Confirmation
Utah - Key Requirements:
  • $250 filing fee and $275 processing fee
  • Fingerprint Cards and Fees
  • Evidence of Education
  • List of loan officers
Wisconsin - Key Requirements:
  • $750 filing fee
  • $120,000 Surety Bond
  • Complete Loan Originator Application

The states with the highest bond rates were Illinois and Wisconsin, New Jersey is third.

Several states require just the initial fee and little else. There is little hindrance to becoming a mortgage broker in several states, and actually nothing in Alaska. Some reasons why certain areas may have less

Let's compare the above list to the FBI's list of Hot Spots for Mortgage Fraud -

Although the map is hard to read the states are California, Nevada, Utah, Colorado, Florida, Georgia, South Carolina, Missouri, Illinois, and Michigan. The data we have found is not broken down by type of mortgage fraud. But it is not surprising that the states several of the states with little barriers for anyone to become a mortgage broker are listed. Illinois was the only state we were surprised. But since "mortgage fraud" is a large definition involving many different crimes the numbers may come from other factors.

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