Mortgage Licensing – What the Application Process is Like

Most of my mortgage broker and lender clients have no idea of what to expect when they hire me. They just know that I will take care of all the details of the application process so they can do other things (like close loans if they are an existing company).

Most applications are still very lengthy and each one is different from the other. The first one that I do for a client is the most time-consuming one for the client because I need to get all of the information that the application requires. By the time I get to the client’s third or fourth state, I have just about all of the information I need and only need to ask a few questions.

After I submit the application, we are forced into a waiting game. The banking departments are all under-staffed (typically there are 1 or 2 people reviewing applications). Depending on how popular a state is (California and New York are very popular, Iowa and Maine are not as popular), the waiting time for review can be 2 weeks to 3 months. If there are any missing documents or questions about one of the responses, a deficiency letter goes out and we need to correct the deficiencies. Many times I send out an application that I know has deficiencies just so that I can get the review process initiated. Depending on how busy a client is, I can turn around the application and re-submit it in days. Other clients do not clear the deficiencies for several weeks.

The reviewers at the banking departments do not get paid better if they process more applications or review them faster. So it is always a struggle to get them to move an application along towards an approval. Sometimes, there is more than one round of deficiencies and the reviewer will ask for something new that was not requested on the previous round. If your new application comes in during renewal season, your application won't be looked at until the renewals are all processed. Typically, the application gets reviewed by about 3 or 4 layers of reviewers, as you go up the chain towards the head of licensing, and each reviewer can raise a new question or ask for another document before signing off and passing it to the next person up the ladder.

And you cannot solicit business from that state until you have the license (although some states will permit you to start once they give the approval).