Mortgage Bankers and Mortgage Brokers
Mortgage Loan Originators
Bona Fide Non-Profit Organizations
Mortgage Bankers and Mortgage Brokers
Annual Financial Statement Requirement and Net Worth Requirement
Are licensees required to submit financial statements to the division each year?
Yes, a mortgage banker is required to submit audited financial statements each year, no later than six months following the end of its most recently completed fiscal year [See Wis. Stat. s. 224.74(1)(b)]. A mortgage broker is required to submit reviewed financial statements each year, no later than six months following the end of its most recently completed fiscal year [See Wis. Stat. s. 224.74(1)(bm)].
Do annual audits and reviews need to be conducted in accordance with generally accepted accounting principles by an independent certified public accountant?
Yes.
How should licensees submit audited or reviewed financial statements to the division?
Licensees should submit audited or reviewed financial statements, as applicable, to the division through the Nationwide Multistate Licensing System & Registry (NMLS).
Is there a net worth requirement for licensees?
Yes, a mortgage banker must maintain a minimum net worth of $250,000, and a mortgage broker must maintain a minimum net worth of $100,000. The applicable minimum net worth amount must be met at all times. See Wis. Stat. s. 224.72(4)(b), Wis. Stat. s. 224.77(1)(i), and Wis. Admin. Code s. DFI-Bkg 43.02(16).
Does a company’s owners’ personal assets count toward the company’s net worth for the purposes of compliance with Wis. Stat. s. 224.72(4)(b), Wis. Stat. s. 224.77(1)(i), and Wis. Admin. Code s. DFI-Bkg 43.02(16)?
No, net worth only includes total tangible assets less liabilities of the company. See Wis. Stat. s. 224.71(9) and Wis. Admin. Code s. DFI-Bkg 40.01(7).
Why is there a deficiency on my company’s license set by NMLS regarding a Financial Condition Mortgage Call Report (MCR)?
NMLS sets automatic deficiencies when a company’s financial condition MCR filing is past due. These deficiencies are cleared by the system when the late financial condition MCR is filed. For licensees that file the standard financial condition MCR, the filing is due annually, within 90 days of the company’s fiscal year end as reported in the MU1 form. For licensees that file the expanded financial condition MCR, the filing is due quarterly at the same time as the Residential Mortgage Loan Activity (RMLA) MCR.
Licenses Needed
If a company holds a mortgage banker license, is it permitted to broker loans without an additional mortgage broker license?
No, the mortgage banker must also apply for and obtain a mortgage broker license prior to brokering Wisconsin residential mortgage loans.
Is a company with a mortgage banker or mortgage broker license permitted to originate home equity lines of credit?
A licensed mortgage banker is permitted to originate home equity lines of credit; a licensed mortgage broker is permitted to broker home equity lines of credit.
Is a company solely providing third-party processing or underwriting services required to obtain a license to process and underwrite Wisconsin residential mortgage loans?
Yes, a company solely conducting processing or underwriting for Wisconsin residential mortgage loans must be licensed as a mortgage banker or mortgage broker. The company must employ at least one individual who holds a Wisconsin mortgage loan originator license. See Wis. Stat. ss. 224.71(1g) and (2).
Main Office and Branch Locations
Are there any requirements regarding a company’s headquarters location?
The main office of a company must be located in Wisconsin or in another state, and it may not be located in a residence. See Wis. Stat. s. 224.72(2m)(b).
Is there a requirement for a licensed mortgage loan originator to work from a licensed branch office?
See Wis. Stat. s. 224.73(5). A mortgage loan originator shall be assigned to and work out of a licensed or registered office or branch office of the sponsoring mortgage banker, mortgage broker, or registered entity. This office shall either be the mortgage loan originator's residence or be within 100 miles of the mortgage loan originator's residence. At each branch office of a mortgage banker or registered entity at which residential mortgage loans are originated for the mortgage banker or registered entity or for another person, and at each branch office of a mortgage broker, there shall be at least one licensed mortgage loan originator assigned to and working out of the office.
Must a branch manager hold a Wisconsin mortgage loan originator license?
If an individual is identified as a branch manager for a branch office, the individual must be licensed as a mortgage loan originator. See Wis. Stat. s. 224.73(5)(b).
May the residence of a mortgage loan originator be licensed as a branch?
Yes.
Licensing Process Questions
How may a company apply for a mortgage banker or mortgage broker license?
A company may apply for a mortgage banker or mortgage broker license through NMLS. All documentation should be submitted through NMLS. If the division has questions regarding the materials submitted, the division will set deficiencies on the pending license application in NMLS, contact the company directly using the contact information provided in NMLS, or communicate using both of those methods.
How may a company or individual obtain assistance with use of NMLS?
For questions related to the NMLS system, companies are encouraged to contact the NMLS Call Center at 1-855-NMLS-123 (1-855-665-7123). The online NMLS Resource Center also provides reference documents, called “Quick Guides,” to assist with common tasks conducted in NMLS.
How long does it take for the division to process a company or branch license application?
The division strives to review all completed applications within seven business days. If additional documentation is required after the initial submission of an application, additional time may be needed.
Does the division issue physical copies of licenses, and if so, should the license be displayed at offices of the company?
No, the division approves applications through NMLS, and companies are not required to display a physical license at offices.
Remote Work for Employees
Are employees permitted to work remotely?
See the division’s
remote work guidance effective 10/5/21, which sets forth the requirements that must be met if mortgage loan originators and other employees of mortgage bankers and mortgage brokers work from home.
Mortgage Loan Originators
Is a mortgage loan originator working remotely subject to the 100-mile requirement set forth in Wis. Stat. s. 224.73(5)(a)?
Every mortgage loan originator must be assigned to a licensed or registered office or branch office located within 100 miles of their residence. While a mortgage loan originator may “work out of” a business office by virtual means, statutory law still requires that the office must be located within 100 miles of the mortgage loan originator’s residence. If the assigned office is farther away than the statute allows, then the mortgage loan originator must license their residence with the division as a branch office.
Does a credit score below a specified threshold or a past bankruptcy automatically disqualify a mortgage loan originator applicant from licensure?
No, the division considers multiple factors when determining whether a mortgage loan originator license applicant has met the requirements set forth by Wis. Stat. s. 224.725(3)(c).
In which circumstances would a mortgage loan originator license applicant’s criminal history result in the denial of a mortgage loan originator license application?
Every applicant must meet the requirements set forth in Wis. Stat. s. 224.725(3)(b). The division may also consider an applicant’s criminal background check when determining whether an applicant meets the character and general fitness requirement set forth in Wis. Stat. s. 224.725(3)(c).
No, an individual will not be permitted to conduct business without being sponsored by a licensed mortgage banker or mortgage broker. If a mortgage loan originator’s sponsorship by a licensed mortgage banker or mortgage broker is removed, or if the company is no longer licensed, the mortgage loan originator’s license will be placed in Approved – Inactive status, and the individual will not be permitted to conduct business until the individual’s license is sponsored by a licensed mortgage banker or mortgage broker.
How long does it take for the division to process an MLO license application?
The division strives to review all completed applications within seven business days. If additional documentation is required after the initial submission of an application, additional time may be needed.
Bona Fide Non-Profit Organizations
Which organizations qualify for exemption from licensure under Wis. Stat. ch. 224, subch. III?
A bona fide nonprofit organization is an organization that is described in section 501 (c) (3) of the Internal Revenue Code and exempt from federal income tax under section 501 (a) of the Internal Revenue Code. It does all of the following: Promotes affordable housing or provides home ownership education or similar services; conducts its activities in a manner that serves public or charitable purposes; receives funding and revenue and charges fees in a manner that does not create an incentive for itself or its employees to act other than in the best interests of its clients; compensates its employees in a manner that does not create an incentive for its employees to act other than in the best interests of its clients; and, provides to, or identifies for, the borrower residential mortgage loans with terms favorable to the borrower and comparable to residential mortgage loans and housing assistance provided under government housing assistance programs. The organization must also comply with the requirements set forth in Wis. Stat. s. 224.72(1r)(e).
How may an organization apply for exemption from licensure under
Wis. Stat. ch. 224, subch. III?
An organization must provide all information listed on the
Wisconsin Bona Fide Nonprofit Organization Exemption checklist (Form MB430) to the division. The documentation can be sent to one of the addresses on the checklist or via email to
DFIMortgageBanking@wisconsin.gov.
What must an organization do to maintain its exemption from licensure each year?
An organization that wishes to maintain its exemption must file all documents required by the division by December 31 of each year.
Is the Mortgage Banking division able to assist with an organization’s charitable organization registration obtained pursuant to Wis. Stat. s. 202.12?
No, the organization is encouraged to contact the Charitable Organizations & Fundraisers section of the Division of Corporate and Consumer Services of WI DFI at
DFICharitableOrgs@dfi.wisconsin.gov or 608-267-1711.
Consumers
Where can a consumer file a complaint with the Mortgage Banking division of WI DFI?
A consumer may file a complaint through
DFI’s website or by submitting a copy of thecomplaint form (Form MB001)
to the division at the address disclosed on the complaint form.
Where can I file a complaint against a national bank?
National banks, federal savings banks and federal savings and loan associations are regulated by the Office of the Comptroller of the Currency (OCC). Complaints against national banks, federal savings banks and federal savings and loan associations can be forwarded to the OCC’s Customer Assistance Group (CAG), which can be reached by phone at 1-800-613-6743, by fax at 713-336-4301, or by mail at OCC Customer Assistance Group, P.O. Box 53570, Houston, TX 77052.
Which types of loans are subject to the statutes administered by the Mortgage Banking division?
Residential mortgage loan activity conducted by entities subject to Wis. Stats. ch. 224, subch. III, is subject to the statutes administered by the Mortgage Banking division. “Residential mortgage loan” is defined as any loan primarily for personal, family, or household use that is secured by a lien or mortgage, or equivalent security interest, on a dwelling or residential real property located in Wisconsin.
How can it be determined whether an entity holds a mortgage banker or mortgage broker license with WI DFI?
Consumers may search for a company on NMLS’s Consumer Access website and see a list of the company’s licenses held.
Contact Us
Phone: (608) 261-7578
Email: DFIMortgageBanking@dfi.wisconsin.gov