Mortgage License Requirements in Texas
Texas passed the Texas Secure and Fair Enforcement for Mortgage Licensing Act in response to the federal Secure and Fair Enforcement for Mortgage Licensing act (SAFE). The state legislation matches the requirements of the federal legislation. Texas assigned licensing and regulation duties to the Texas Office of Consumer Credit Commissioner's office. Anyone wishing to originate mortgage loans in Texas must have the appropriate licenses before offering anyone a loan or discussing terms or rates.
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Registration
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Before completing any of the licensing steps, applicants must register with the Nationwide Mortgage Licensing System and Registration (NMLS). If the applicant already holds a SAFE compliant license through another state, registration is not required. The registration is universally accepted for all 50 states. Once registered, the applicant searches for approved schools and can find links outlining license requirements for all 50 states.
Education
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Texas requires each applicant complete at least 20 hours of education before taking required tests. The education may be completed in person at an approved school or online with an instructor. Topics must include federal laws, Texas specific state laws, Fair Lending laws and nontraditional mortgage products.
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Testing
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Once the education is complete, the applicant registers to take two tests. One is a federal test and the other is the Texas state exam. If the applicant already holds another SAFE compliant license, then the federal test is not required. Each test must be passed with at least a 75 percent passing score. If the applicant fails either test, the applicant may retake the failed test. Applicants do not have to retake both tests if only one is failed. NMLS approved testing providers must administer the testing.
Background Checks
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In addition to the education and testing, applicants must also submit to a background check. The NMLS forwards the background application to the FBI for processing. Each applicant must submit fingerprints to the NMLS along with filling out the appropriate background check authorization forms. Recent felony convictions and any felony conviction for dishonesty, breach of trust or money laundering bars an applicant for life. A credit report is also pulled for the applicant. The SAFE Act requires the applicant show an ability to handle his own finances. Major derogatory issues including recent bankruptcy or foreclosure may cause the license to be declined.
Application
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Once you complete all of the required steps, the application must be completed and sent to the Texas Office of Consumer Credit Commissioner's office. The application fee is $325, which includes a $25 fee for the Texas Recovery Fund. This fee is due at application and each year when the license is renewed.
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