Reglith

Mortgage licensing / Texas

Texas Mortgage Company License

company licence · NMLS TXSMLCOMPANY_C · OCCC

Requirements (13)

  1. Step 1

    Other Trade Name: If operating under a name that is different from the applicant’s legal name, that name (“Trade Name”, “Assumed Name” or “DBA”) must be listed under the Other Trade Names section of the Company Form (MU1).TX-SML does not limit the number of other trade names. If operating under an “Other Trade Name”, upload Assumed Name Certificate regarding ability to do business under that trade name. This document should be named TX Trade Name – Assumed Name. Information about registering a trade name in Texas can be obtained from the Texas Secretary of State.

    Submitted via: NMLS Upload in NMLS: under the Document Type Trade Name/Assumed Name Registration Certificates in the Document Uploads section of the Company Form (MU1).

  2. Step 2

    Entity or Other Trade Name: Inclusion of Terms (Bank, Banc, Bank and Trust, Trust) Under Texas Finance Code §31.005, the use of terms such as “bank,” “bank and trust,” “banc,” or similar terms in a name is prohibited if it suggests or implies that the entity is conducting banking business in Texas. If your company's name or trade name include any of these terms, it is necessary to contact the Texas Department of Banking to secure a letter of no objection. This letter must verify that the Texas Department of Banking does not oppose the use of your company name, which incorporates the word Bank, Banc, Bank and Trust, Trust, or any comparable term. Details on how to proceed with obtaining a letter of no objection are available from the Texas Department of Banking.

    Submitted via: Upload in NMLS: under the Document Type TX Letter of No Objection in the Document Uploads section of the Company Form (MU1).

  3. Step 3

    Resident/Registered Agent: The Resident/Registered Agent name and address must be listed under the Resident/Registered Agent section of the Company Form (MU1) and must match the information currently filed with the Texas Secretary of State. A registered agent is an individual Texas resident or an organization that is registered or authorized to do business in Texas. Although an officer, owner, or employee may serve as an entity's registered agent, an entity may not serve as its own registered agent. An entity may contract for registered agent services from another business entity, such as a service company. The registered agent must be located in Texas. Information about registered agents in Texas can be obtained from the Texas Secretary of State.

    Submitted via: NMLS

  4. Step 4

    Primary Contact Employees: The following individuals must be entered into the Contact Employees section of the Company Form (MU1). 1. Primary Company Contact. 2. Primary Consumer Complaint Contact. The Primary Contact Employee field is extremely important. The Primary Contact Employee must be authorized to receive ALL compliance and licensing information, communications, and mailings regarding the entity, officers, directors, and residential mortgage loan originators identified to the state. The Primary Contact Employee is responsible for disseminating all information received from the TX-SML to the entity and its employees. This position is not required to be the Resident/Registered Agent.

    Submitted via: NMLS

  5. Step 5

    Qualifying Individual: TX-SML requires a Qualifying Individual be identified on the Form MU1 filing. This individual must be listed in the Qualifying Individual section of Company Form (MU1). The Qualifying Individual must (see 7 Texas Administrative Code § 56.2): (1) hold an active Texas-SML residential mortgage loan originator license which authorizes the individual to conduct regulated activities; (2) be sponsored by the mortgage company; (3) maintain a valid unique identifier issued by the NMLS; and (4) be designated by the mortgage company as the company’s representative responsible to the commissioner and members of the public for any act or conduct performed by the residential mortgage loan originator sponsored by or acting for the mortgage company in connection with: (a) the origination of a residential mortgage loan; or (b) a transaction that is related to the origination of a residential mortgage loan in which the qualifying individual knew or should have known of the transaction. A “Qualifying Individual” is defined by Texas Finance Code § 156.002(10-b) as “an individual who is: (A) licensed under Chapter 157 as a residential mortgage loan originator; and (B) designated by a residential mortgage loan company as the company’s representative.”

    Submitted via: NMLS

  6. Step 6

    Branch Office Licenses: Each branch office must be separately licensed and file a Form MU3 through NMLS. A “branch office” is any office a mortgage company maintains that is separate and distinct from its main office, whether located in Texas or not, at which it conducts residential mortgage loan origination business with mortgage applicants or prospective mortgage applicants in Texas or concerning residential real estate located in Texas. See 7 Texas Administrative Code § 56.206(a)(2).

  7. Step 7

    Sponsorship of Individual Originators: Each residential mortgage loan originator (An individual who for compensation or gain or in the expectation of compensation or gain: (1) takes a residential mortgage loan application; or (2) offers or negotiates the terms of a residential mortgage loan) must be separately licensed and file a Form MU4 through NMLS. After the MU4 is submitted, the mortgage company must submit a sponsorship request to the Texas-SML before the individual MU4 license will be approved. See 7 Texas Administrative Code § 56.107. A quick guide entitled “Create a Company Sponsorship” at the following link will help walk you through this process: NMLS Quick Guides.

  8. Step 8

    Certificate of Authority/Good Standing Certificate: If the company was organized or formed outside of Texas, Upload a State-issued and approved document (Texas Secretary of State’s office), dated not more than 60 days prior to the filing of the application through NMLS that demonstrates authorization to do business in TX. This document should be named TX Certificate of Authority OR TX Certificate of Good Standing. Note: A foreign filing entity, as described in Section 9.001 of the Texas Business Organizations Code, must file an application for registration, previously known as an application for certificate of authority, if it “transacts business” in Texas. Section 9.001 of the Texas Business Organizations Code only requires a certificate of authority for the following entities: corporations; limited partnerships; limited liability partnerships; limited liability companies; business trusts; real estate investment trusts; cooperatives; public or private limited companies; any other foreign entity that, if formed in Texas, would be formed as a corporation, limited partnership, limited liability company, professional association, cooperative, or real estate investment trust; and any other foreign entity that affords limited liability under the law of its jurisdiction of formation for any owner or member. A true sole proprietorship is not required to obtain a certificate of authority from the Texas Secretary of State. More information about the out-of-state entity registration can be obtained from the Texas Secretary of State.

    Submitted via: Upload in NMLS: under the Document Type Certificate of Authority/Good Standing Certificate in the Document Uploads section of the Company Form (MU1).

  9. Step 9

    Document Samples: Upload copies of the following sample documents used in the regular course of business in connection with this license: • IRS Employer Identification Number Verification Document A copy of the SS-4 letter or 147C letter from the Internal Revenue Service (IRS) must be provided that confirms the company’s Employee Identification Number (EIN). Note: A SS-4 application form will not be accepted by TX-SML as proof of the issuance of an EIN. Company name listed on the IRS document must match exactly as the name listed on the MU1 and with Texas Secretary of State. This document should be named [IRS EIN Verification].

    Submitted via: Upload in NMLS: under the Document Type IRS EIN Verification in the Document Uploads section of the Company Form (MU1).

  10. Step 10

    Company must be in good standing with the Texas Secretary of State and the Texas Comptroller of Public Accounts.

  11. Step 11

    Formation Documents: Determine classification of applicant’s legal status and submit true and correct copies of the applicable documentation detailed below. Sole Proprietorship • None Unincorporated Association: • By-Laws or constitution (including all amendments). General Partnership: • Partnership Agreement (including all amendments). Limited Liability Partnership: • Certificate of Limited Liability Partnership; and • Partnership Agreement (including all amendments). Limited Partnership: • Certificate of Limited Partnership; and • Partnership Agreement (including all amendments). Limited Liability Limited Partnership: • Certificate of Limited Liability Limited Partnership; and • Partnership Agreement (including all amendments). Limited Liability Company (“LLC”): • Certificate of Formation or similar document (including all amendments); • Operating Agreement (including all amendments); • IRS Form 2553 or IRS Form 8832 if S-corp or C-corp treatment elected; and • LLC resolution if authority not in operating agreement. Corporation: • Certificate of Formation or similar document (including all amendments); • By-laws (including all amendments), if applicable; • Shareholder Agreement (including all amendments), if applicable; • IRS Form 2553 if S-corp treatment elected; and • Corporate resolution if authority to complete application not in By-Laws or Shareholder Agreement, as amended, as applicable. Not for Profit Corporation • Documents requested of a Corporation; and • Proof of nonprofit status • IRS 501(c)(3) designation letter; or • statement from a State taxing body or the State attorney general certifying that: (i) the entity is a nonprofit organization operating within the State; and (ii) no part of the entity’s net earnings may lawfully benefit any private shareholder or individual; or • entity's Certificate of Formation or similar document if it clearly establishes the nonprofit status of the applicant; or • Any of the three preceding items described, if that item applies to a State or national parent organization, together with a statement by the State or parent organization that the applicant is a local nonprofit affiliate. Trust (Statutory) • Certificate of Trust; and • Governing instrument (including all amendments).

    Submitted via: Upload in NMLS: under the Document Type Formation Document in the Document Uploads section of the Company Form (MU1). This document should be named Formation Documentation [Date of Creation (MM-DD-YYYY)].

  12. Step 12

    Management Chart: Submit a Management chart displaying the applicant’s directors, officers, and managers (individual name and title). Must also identify compliance reporting and internal audit structure. This document should be named [Company Legal Name] Management Chart. Note: If the existing uploaded management chart already includes the above information, an additional document does not need to be uploaded. A company should only upload a single management chart.

    Submitted via: Upload in NMLS: under the Document Type Management Chart in the Document Uploads section of the Company Form (MU1).

  13. Step 13

    Organizational Chart/Description: Submit a chart showing (or a description which includes) the percentage of ownership of: • Direct Owners (total direct ownership percentage must equate to 100%) • Indirect Owners • Subsidiaries and Affiliates of the applicant/licensee This document should be named [Company Legal Name] Organizational Chart – Description. Note: If the existing uploaded Organizational Chart/Description already includes the above information, an additional document does not need to be uploaded. A company should only upload a single management chart.

    Submitted via: Upload in NMLS: under the Document Type Organizational Chart/Description in the Document Uploads section of the Company Form (MU1).

General information

GENERAL INFORMATION Who Is Required to Have This License? A person may not act in the capacity of, engage in the business of, or advertise or hold that person out as engaging in or conducting the business of a residential mortgage loan company in Texas unless the person holds an active residential mortgage loan company license, is registered as a financial services company, or is exempt from licensure. See Texas Finance Code § 156.201(a). A “mortgage company” is a corporation, company, partnership, or sole proprietorship that engages in the business of residential mortgage loan origination on real property located in Texas. See Texas Finance Code § 156.002(8-a). A “residential mortgage loan” is “a loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or on residential real estate.” See Texas Finance Code §180.002(18). A residential mortgage loan includes new loans and renewals, extensions, modifications, and rearrangements of such loans. The term does not include a loan which is secured by a structure that is suitable for occupancy as a dwelling, but is used for a commercial purpose such as a professional office, salon, or other non-residential use, and is not used as a residence. See 7 Texas Administrative Code § 56.2(17). “Residential real estate” is real property located in Texas on which a dwelling is constructed or intended to be constructed.” See Texas Finance Code § 180.002(20). In addition to the licensing requirement for originating residential mortgage loans, a person may not make a wrap mortgage loan unless the person is licensed as a mortgage company, registered as a mortgage banker, or exempt from licensing or registration requirements. See Texas Finance Code § 159.051. A “wrap lender” is defined by Texas Finance Code § 159.001(6) as “a person who makes a wrap mortgage loan; or an owner of residential real estate who contacts with another person to make a wrap mortgage loan to a wrap borrower on the owner’s behalf to finance the purchase of the owner’s residential real estate.” A person is considered to make a wrap mortgage loan “when a person determines the credit decision to provide the wrap mortgage loan, or the act of funding the wrap mortgage loan or transferring money to the wrap borrower. A person whose name appears on the loan documents as the payee of the note is considered to have ‘made’ the wrap mortgage loan.” See 7 Texas Administrative Code § 59.2(7). For wrap mortgage loan transactions, the following entities must be licensed or registered: (1) a person making the credit decision to make the wrap mortgage loan; (2) the lender of record shown on the promissory note; (3) hard-money lenders; (4) table funding or correspondent lenders where the wrap mortgage loan is closed in a broker’s name as the lender on the promissory note but the funding for the wrap mortgage loan comes from a prearranged buyer of the loan or from a “warehouse” line of credit extended by a bank, financial institution or other entity; and (5) a person originating a wrap mortgage loan on behalf of a lender.

Other Texas mortgage licenses

Sourced from the NMLS/CSBS state licensing record, last updated December 4, 2024. Requirements change — confirm against the state agency before filing. Not legal advice.

Stop missing the rule that costs you a loan.