Challenges of Having More Than One License

Have you ever seen the commercial where the lady says “we intend to go global, right after we go national”? I get many inquiries about getting a “national” license. There is no national license for mortgage brokers or mortgage lenders. You get each state's license one by one.

I have clients that are regional – either in New England or the southeast corner of the United States or along the Pacific coast. It helps if all of your states are in the same time zone. Are there any downsides to having more than one license?

The major challenge that my multi-state licensed clients face is the notion that what one state requires or permits may not be the same in another state. I tell those clients that each state is like a mini-kingdom with its own rules about everything. Some states have required disclosures, other states do not. Some states require that you keep a trust account, others do not. You must be knowledgeable about each state’s rules and regulations and follow them. You can plead ignorance only during the first state examination. After that, the fines and penalties for not following the rules become expensive.

The other major challenge when you have multiple state licenses is that you must keep on top of the license renewals, banking department annual reports and secretary of state annual reports (when those pesky Certificates of Authority?). For one or two states, this is not a big problem, with several states to keep track of, you might need an employee to keep track of all of your requirements. Or you can hire outside help, which I provide for many of my clients who don’t want to be bothered with remembering when it’s time to prepare another filing.