The Texas Department of Saving and Mortgage Lending is one of 3 agencies that issues mortgage licenses. Be aware that there are different kinds of mortgage loan originator licenses. One is issued by the Department of Saving and Mortgage Lending. The others are issued by the Texas Office of Consumer Credit Commissioner. If you are intending on becoming a licensed mortgage loan originator, then you should check both sets of requirements. Depending on your situation, you may have to get one or both licenses. The Texas Department of Banking also issues money transmission licenses.
Note: In this article, I will now just use “Department” to refer to the Texas Department of Saving and Mortgage Lending.
As previously mentioned, the Department issues a mortgage loan originator license. But it also has license categories for mortgage brokers and others. A list of the others follows:
1. mortgage banker;
2. mortgage banker branch;
3. mortgage company;
4. mortgage company branch;
5. auxiliary mortgage loan activity company;
6. credit union subsidiary organization;
7. credit union subsidiary organization branch;
8. financial services company;
9. independent contractor processor/underwriter company; and
10. mortgage loan servicer.
With the types mentioned above, you might also have to get more than one license. So you should understand the exact activities of your prospective mortgage business so you can find out which licenses you need.
Auxiliary mortgage loan activity companies are only those who are either a Texas or federal government agency assisting Texas borrowers or a 501(c)(3) nonprofit helping people buy affordable homes.
Residential mortgage loan servicers must also get a license. These are people or companies who receive funds from borrowers and then process them on behalf of the lender. It applies to residential loans, not commercial mortgages.
The mortgage company license is for loan originators. It is also for residential loans only. Mortgage bankers also must register for residential loans only. The Texas definition of a mortgage banker is complicated. You should read Texas Finance Code Chapter 157 to determine if your organization is a mortgage banker.
A financial services company is a kind of mortgage company for residential loan origination. However, it uses individuals to conduct business, and those individuals are the exclusive agents of the company. This is complicated. But the Department can tell you whether you actually qualify as a financial services company. Call 512-475-1350 and have your business details ready so you can explain what you are trying to do with your business. They will then make a determination on whether this is the correct license for your business. The advantage to this license is that mortgage companies must have a physical office in Texas.
The independent contractor processor/underwriter license is for people who do clerical work for a licensed residential mortgage company or other loan originator. This one has less requirements than most of the other licenses since these companies are not actually lending any money.
Credit union subsidiary organizations are at least partially owned by a credit union. They must get a license if they assist the credit union in processing residential mortgage loans.
Mortgage company, banker, and credit union subsidiary organizations must get an extra license for additional branches. The Department does not issue any other kind of branch licenses for the other types.
Mortgage loan originators are basically individual loan officers that are employees of a mortgage broker or banker. They must be licensed even though they do not personally lend money to borrowers. Certain education and exam requirements usually apply. 23 hours (3 dealing with Texas law) of education must be obtained. As of October of 2013, applicants must pass the National Test Component With Uniform State Content. You must have a sponsoring employer to get the license application approved.
NMLS has application forms for each type of mortgage license issued by the Texas Department. You can find links to those forms on the following page. The application packets contain the surety bond, application fee, and other requirements. Fees are around $200 to $700 for these Texas mortgage licenses.