WANT TO OPEN YOUR OWN MORTGAGE BROKERAGE?

why become an independent broker owner?

There’s a growing trend in the mortgage industry: independent brokers are opening their doors, gaining momentum and increasing market share. In fact, some say independent mortgage brokers will hold 20% of the market by 2020. Mortgage entrepreneurs are opening shops all across the country and more borrowers are seeking them out locally for help in finding their ideal home loan. Best of all, industry support for independent brokers has never been greater. Organizations exist that are dedicated to helping you grow your business and support your success. You’re already doing the work. If you’ve ever considered starting your own business, find out why now could be the right time.

Not quite ready to start your own business? Find out more about being a wholesale loan originator.

you can do this

Take the first step. Complete the form to receive more information on opening your own shop, being your own boss and reaping the benefits.

getting started is easier than you think

STEP 1: GETTING STARTED

Choose a business name, check with your state registry to see if that name is available, and register it with the states in which you plan to do business. Don’t forget to check for an available URL if you plan to have a website. 

Set up your business entity and determine what type of business is best for you (Sole Prop, LLC, S-Corp, etc.). Most states allow Sole Proprietors with a DBA trade name (a.k.a. fictitious name), it is recommended that you check with your individual state requirements and seek the advice of a CPA/accountant. 

Open up your business bank account and/or trust account (if applicable). 

STEP 2: LICENSING

Review state requirements for company licensing at http://mortgage.nationwidelicensingsystem.org/slr/Pages/default.aspx. Each state has its own requirements which may include minimum net worth, surety bond, annual financials (audited or unaudited), varying licensing fees to apply and insurance requirements.

Start the application for your licenses at the NMLS website at http://mortgage.nationwidelicensingsystem.org This link will help you navigate inside NMLS: http://mortgage.nationwidelicensingsystem.org/slr/resources/Pages/CompanyQuickGuides.aspx

File a Mortgage Call Report (MCR). Submitting consumer loan data quarterly to the NMLS is required in most states. Information on the Mortgage Call Report can be found here: http://mortgage.nationwidelicensingsystem.org/slr/common/mcr/Pages/default.aspx.

In addition, you should research your own state for any annual reports that are required by the state for your business.

STEP 3: SIGNING UP WITH WHOLESALE LENDERS

Find at least three lenders to partner with that fit your needs, then add as needed. Choose your lender partners wisely to ensure they have fair business practices when working with brokers. Suggested lenders include: 

  - Conventional: United Wholesale Mortgage, Parkside Lending

  - FHA/Renovation: Plaza Home Mortgage

  - Low Credit: Nations Direct

  - New Construction: First Guaranty Mortgage, Flagstar Bank

  - Non-Agency/Non-Prime: Angel Oak Mortgage Solutions 

Visit https://www.stopwholetaillending.com/ to learn more about protecting your business from questionable lending practices. 

Each lender has their own approval requirements which may include a minimum net worth, number of years of industry experience and/or expected monthly loan volume. Broker application approval typically begins once your company license is approved by the state. 

Support and grow with the mortgage brokerage community:

  - AIME: Association of Independent Mortgage Experts (Free Membership through the end of 2018) https://www.aimegroup.com/

  - NAMB: National Association of Mortgage Brokers http://www.namb.org/

STEP 4: SETTING UP YOUR ORIGINATION TOOLS

Sign up with a Credit Reporting Company (CRC). Contact a company that will fit your pricing options and credit needs. There are over 80 different CRCs to choose from, including Kroll Factual Data, Equifax, CBC Innovis, Clear Choice Credit (Flat Fee Discount available) and more. 

Obtain Loan Origination Software (LOS). Calyx Point, Encompass Byte Software have integrations with Fannie Mae, Freddie Mac and credit reporting agencies. Ask how your LOS representative can help set up your loan disclosures, credit report integration and pipeline reporting in preparation of NMLS Mortgage Call Reports. 

STEP 5: SETTING UP COMPLIANCE AND INSURANCE

Research your options. Make it a goal to set this up within the first 60 days of setting up your new business. A full compliance management system includes written policies and procedures, company management expectations, employment agreements, and marketing your business legally and compliantly. 

Contact your insurance agent. E&O Insurance is recommended. A general liability business policy is optional. 

* The material set forth above is provided for informational purposes only and does not constitute legal or other professional advice. Links to third-party websites are provided for convenience only. UWM does not endorse and is not responsible for the content of these third-party sites. Information on potential lender partners is provided for informational purposes only. UWM is not affiliated with and does not endorse these lenders.