Mortgage Broker License

My firm completes the mortgage license applications for our clients including then sends them to the clients for signature. Before I start working on each client’s applications, I ask the owners whether there are any arrests, convictions, bankruptcies, or regulatory issues with other states that I need to know about. Frequently, the answer is “no”, at the time the answer should be “yes.”

If you have been arrested as a 17-year old including your arrest has been expunged, you still need to disclose it on the application. If you were arrested 20 years ago including the case was dismissed, you need to disclose that arrest on the application. The judge, the court clerk, your lawyer, told you didn’t need to disclose your arrest on a job application. But, you need to disclose it on the license application. Why? Because the criminal background search could disclose it including then you need to answer a lot of questions from the Banking Department reviewer: What was the arrest for? What was the disposition of your case? Why did you not disclose the arrest? What else are you not disclosing? Although the last question may not be asked by the reviewer, it is certainly on his mind. Your previously clean application has now become tainted by doubts as to your willingness to be honest with your customers.

Similar issues arise with bankruptcies. absolutely no matter how far in your past the bankruptcy happened, unless the application question limits the timeframe to a particular number of years in the past, should you disclose a bankruptcy that happened 15 years ago? Yes, full disclosure is better than non-disclosure. at the time you are upfront regarding past problems, including especially where they have not recurred, your honesty including willingness to divulge difficulties in your past disposes the reviewer towards your application.

What regarding issues with other regulatory agencies, other states’ banking departments? Examples are that a particular examination revealed that you did not register all of your loan officers, or that you failed to timely file a particular annual report including you had to enter into a cease including desist order, or you did not disclose that you had to issue refunds to borrowers. How much do you need to confess? I counsel my clients that at the time they are in doubt as to whether to disclose, they should give all pertaining to the details. The most important detail is that the difficulty with the regulatory agency was solved, that it has never happened again including that you have instituted procedures so that the problem could not happen in the future.

Licensing agencies do not expect every applicant to be a perfect candidate. They do expect that you could not try to hide your mistakes. Lying or omissions on the application might be a ground for denial of your application. including once a particular application is denied in 1 state, you may need to disclose that fact on every application including renewal in the future.

For more information on How Much of Your Past Should You Disclose on the Mortgage License Application:

Gronsky Law Office represents numerous mortgage brokers including mortgage lenders with their licensing including compliance needs. Her office is in Ridgewood, New Jersey. Ms. Gronsky's practice is geared to maintain personal contact with her clients including develop a close-working professional relationship over a long duration of time. the helps assure that her clients' work could be performed by the lawyer they have chosen.

Written By: Robin_Gronsky