FHA is an acronym which stands for Federal Housing Administration. This is a housing agency within the US Department of Housing and Urban Development or US-HUD and this government agency has issued a series of guidelines for FHA mortgage brokers or lenders who want to make broker loans out of these programs. A broker needs to study the brokers’ guidelines carefully to be able to set up the right type of business. Becoming an FHA broker is a serious matter because the legitimate guidelines make it very difficult for shady brokers so start and set up as business or government-sponsored loans.
What Is Needed To Be A Mortgage Broker?
Starting 2010 and beyond, every mortgage broker is required to have a license. The licensing process starts by registering with the NMLS or Nationwide Mortgage Licensing System. The official website of NMLS will inform the applicants to have a complete criminal background check, fulfill certain education requirements before availing a license, take the state components and nationwide test for mortgage loan originator, and authorize a credit report. The next procedure is to complete the requirements needed for the state license. NMLS also makes a summary of common requirements needed for state licensee.
For you to begin as a mortgage broker, you will need a state license broker to help you set up your business by following the government guidelines. A mortgage broker must create a partnership, corporation, Limited Liability Company, or a chartered financial institution unless the state exempts him to do so. A mortgage broker is also required to hire a staff, at least two workers working full time for him in a separate office. The public should find it easy for them to access and reach your office through the use of signs and a building directory listing. While a broker works in his or her office, the full time employees must work only for him or her.
FHA Mortgage Broker Financial Requirements
The need to satisfy financial requirements is probably the most challenging aspect of having yourself become a mortgage broker. A mortgage broker must be able to demonstrate a minimum adjusted net worth of $63,000 and $25,000 for every office branch. He should have a total maximum net worth standard of $250,000. Out of the mortgage broker’s total net worth, 20 percent should make up the liquid assets. On the application form, a loan correspondent should provide audited financial statements and at least a page of adjusted net worth. And the most important thing of all, a mortgage broker’s application should get a sponsorship from a particular financial lender. The sponsorship that is provided by a financial lender should indicate that it will provide the loan funding for every Federal Home Administration home mortgage.
If you are looking for FHA Mortgage Brokers or looking on how to become one or just some general information regarding this type of mortgage broker hopefully this article has been of some help to you.