How To Become a Mortgage Loan Originator (Officer) In Texas

There are two different mortgage loan originator (or mortgage loan “officer”) licenses in Texas. One is an employee of a Chapter 156 or 157 mortgage banker or broker. The Texas Department of Savings and Mortgage Lending is the issuing agency for this first license. The second license is issued by the Texas Office of Consumer Credit Commissioner. The statutes do not describe this mortgage loan originator as an employee.

I have discussed the Texas Department of Savings and Mortgage Lending mortgage loan originator license requirements in a separate article. Just click on “Texas mortgage license” in the tags below and find the article on the Department’s licensing. The rest of this article will deal with the Texas Office of Consumer Credit Commissioner license for mortgage loan originators.

This license is required for residential mortgage loans only. But within the context of residential loans, it also applies to property tax loans, home equity loans, and secondary mortgage loans. In this case, a property tax loan is one taken out to pay property taxes, and the collateral for that loan is a residence. Mobile homes are also included in the definition. However, there is a limitation. Only structures with up to 4 family housing units apply. Individual condo units are included, though.

Mortgage loan originators must pass a background check and show good credit history for financial responsibility. The other main requirements are education and testing.

Applicants must take and pass the National and Texas components of the SAFE test. Sometimes, the exact exam requirement changes. But for the foreseeable future, you will probably have to pass whatever test is applicable at the time of application.

Pre-license education must be taken, as well. As of the time of this writing, NMLS says it is 20 hours. The other Texas mortgage loan officer license requires 23 hours. So you may have to do more. Just check with the education providers, telling them the exact license you are trying to obtain. They should know the most current rule at the time you are registering for classes. I would just take a 23-hour course to make sure you are qualified (see below on how to find these classes).

A $25 recovery fund fee is mandatory. Other possible fees include about $15 for a credit report and about $36 for a background check. As of the time of this post, there is a fee of $355 for this license.

Although you must have an employer to activate this license, it will be issued in an inactive status if you are not employed at the time of acceptance. This is different than the other Texas MLO license, which is not issued at all unless you already have an employer.

Mortgage loan officers use the MU4 to apply for a license: (MU4 Form Instructions)

To be on the safe side as far as education, you may choose to take a 23-hour TX-SML Comprehensive Mortgage Loan Originator course. This will fulfill the requirements for either Texas license. You can scroll down to find the Texas courses.

You probably don’t need to get both of these Texas MLO licenses. Don’t apply for a second one until asking the authorities first. The Texas Office of Consumer Credit Commissioner can be reached at 512-936-7600.

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