Mortgage Originators & Servicers
FAQs-for Mortgage Originators & Servicers
I want to engage in residential mortgage loan activities. What license do I need?
Effective August 1, 1999, Minnesota Statutes Chapter 58 requires a person who acts as a residential mortgage originator or makes residential mortgage loans (which includes both brokers and lenders), to obtain a residential mortgage originator license. A person who services residential mortgage loans must obtain a residential mortgage servicer license.
What are the initial application fees?
The initial license application fee for a residential mortgage originator is $850. However, a new licensee whose license expires less than 12 months from the date of issuance would only pay $425. The initial license application fee for a residential mortgage servicer is $1000. As with the originator license fee, the fee would be $500 if the license expires less than 12 months from the date of issuance.
A Certificate of Exemption application fee is $100.
All fees are nonrefundable unless an overpayment of a fee was made.
What are the renewal fees?
The residential mortgage originator license renewal fee is $450. The residential mortgage servicer license renewal fee is $500.
Are there any educational requirements to get a license?
No, there are currently no educational requirements in the regulations.
How long is my license good for?
All residential mortgage originator and servicer licenses are valid through July 31 of each odd-numbered year. If you have a Certificate of Exemption, there is no expiration date. The Certificate of Exemption is valid as long as the information contained in the application that was the basis for the exemption remains the same.
Are there any exemptions from getting a license?
Chapter 58 provides for several exemptions from the licensing requirements, some of which need Certificate of Exemption. The most common exemptions are issued to real estate brokers, insurance agents and financial institutions.
Does a bank that makes or services residential mortgage loans have to apply for a license or Certificate of Exemption?
Chapter 58 does not apply to a bank, savings bank, savings association or credit union subject to supervision by either a federal regulatory agency or the Commissioner of Commerce. However, the standards of conduct found in section 58.13 do apply.
If I am FHA, VA or HUD approved, do I need a license or am I exempt?
You would need a residential mortgage originator license. Being FHA, VA or HUD approved does not exempt you from the licensing requirements.
Do I need both an originator license and a servicer license if I perform both activities?
No. Minnesota Statutes Chapter 58.04, subd. 2(b) (1) exempts a person from the servicer licensing requirements if the person is licensed as a residential mortgage originator. However, a residential mortgage originator must provide a $50,000 surety bond or an irrevocable letter of credit. However, an originator or servicer who is approved by FNMA or FHLMC would not have to provide a bond or a letter of credit.
What license do I need if I am making only commercial mortgage loans?
A real estate limited broker's license issued under Minnesota Statutes Chapter 82 is required for doing commercial mortgages. You should contact the Real Estate Licensing Division of the Commerce Department at 651-296-6319 for more information.
Do I need a separate license to make second mortgage loans?
The residential mortgage originator license authorized both first and second mortgages.
I am a loan officer working for a licensed residential mortgage originator. Do I need a license?
You would not need a license if you are an employee of a licensed residential mortgage originator. An employee means an individual who is treated as an employee by the residential mortgage originator or servicer for purposes of compliance with federal income tax laws.
Do I need a license if I am an independent contractor to a licensed residential mortgage originator?
Yes you would need a license. You are only exempt if you are an employee (W-2) of a licensed mortgage originator or servicer.
I am an out-of-state residential mortgage originator wanting to do business in Minnesota . Do we have to have a physical presence?
A physical presence is not required. However, you should contact the Minnesota Secretary of State (651-296-2803) for information on registering as a foreign corporation.
I only make a couple of loans a year in Minnesota . Do I need a license or can I get an exemption?
A person who is not in the business of making or servicing residential mortgage loans and who makes no more than three such loans, with its own funds, during any 12-month period, is exempt.
How do we register or get a license for a branch office?
Minnesota does not require registration or licensing of branch offices. Written notification of any branch locations within the State of Minnesota is required as part of the application.
Do I need a surety bond?
A surety bond or an irrevocable letter of credit of not less than $50,000 is required of mortgage originators that service residential mortgage loans. The exception to this requirement is if the originator is FNMA or FHLMC approved. A person licensed as a residential mortgage servicer must maintain a surety bond or an irrevocable letter of credit of not less than $100,000. Again, the FNMA or FHLMC approval would exempt a person from this requirement.
When do I have to renew my license?
The residential mortgage originator and servicer licenses expire on July 31 of each odd-numbered year. Renewal materials will be mailed to all licensees one to two months prior to the expiration date. An application for a renewal license is due July 15 of the renewal year.
The Certificate of Exemption does not have an expiration date.
What kind of records are licensees required to maintain and how long must such records be maintained?
A licensee or exempt person must keep and maintain for 26 months the business records regarding residential mortgage loans applied for, originated, or serviced in the course of its business.
Under what circumstances must a licensee have a trust account?
A licensee or exempt person must deposit into a trust account any funds received from a borrower that are held in a fiduciary capacity for later distribution. Examples of trust funds are appraisal fees, credit report fees, taxes or insurance premiums.
Can we do business under an assumed name?
A licensee may do business under no more than one name or title. In other words, a licensee can apply to the Secretary of State and file an assumed name to be added to the license. However, if business is conducted with more than one assumed name, an additional license would have to be obtained.
How do I notify you of an address change? Is there a fee?
Any material changes to the information that was submitted with the initial application must be made within ten days of the change. The changes should be made in writing or by amending the relevant pages of the application. There is no fee for making changes.
We are no longer doing business in Minnesota . What should we do?
A licensee that ceases activity that is regulated under Chapter 58 must notify the Commissioner of Commerce, in writing and, at the same time, surrender the license. The licensee must also include a plan for the withdrawal from the business, including a timetable for the disposition of the business.
What is the disciplinary authority of the Commerce Department with regard to licensed mortgage originators and servicers?
As with other licenses issued by the Commerce Department, the Department may deny, suspend or revoke a license. A licensee may also be censured or imposed a civil penalty for violations.
How can I get answers to any other questions I may have?
You may contact us by telephone at 651-282-9855 or contact us by e-mail at financial.commerce@state.mn.us .
