Frequently Asked Questions

Chapter 224, Subchapter III, became effective January 1, 1999. The statutes provide that a person may not act as, use the title of, advertise or otherwise portray himself or herself as a mortgage banker, mortgage broker, or loan originator unless the person has been issued a license from the Department of Financial Institutions, Division of Banking. Any person, including a real estate licensee, who acts as a "Mortgage Banker," "Mortgage Broker," or "Loan Originator" will be required to obtain the appropriate license.

A Mortgage Banker is a corporation, partnership, limited liability company (LLC) or individual who either originates loans for another person or for itself as payee on the note, sells loans or interests in loans to another person, services loans or land contracts, or provides escrow services.

A Mortgage Broker is a corporation, partnership, limited liability company (LLC) or individual who, on behalf of a loan applicant or an investor (a mortgagee or a land contract vendor), and for commission, money, or other thing of value, finds a loan or negotiates a land contract, loan, or commitment for a loan, or engages in table funding.

"Finds a loan" means to assist a loan applicant in locating a lender for the purpose of obtaining a loan for the applicant and to make arrangements for a loan applicant to obtain a loan.

"Negotiate" means to discuss, explain or present the terms and conditions of a loan or land contract with or to a loan applicant (does not include making an underwriting decision on a loan).

"Originate" means to make an underwriting decision on a loan and close a loan.

"Table funding" means a transaction in which a person conducts a loan closing in the person’s name with funds provided by a third party and the person assigns the loan to the third party within 24 hours of the loan closing.

A Loan Originator is an individual who, on behalf of a mortgage banker or mortgage broker, finds a loan or negotiates a land contract, loan, or commitment for a loan. Any individual, including an officer, W-9 subcontractor employee, or a W-2 hourly or salaried employee, who performs such activities on behalf of a mortgage banker or mortgage broker, must be licensed as a loan originator. For Loan Solicitor information, see Loan Solicitors Frequently Asked Questions (PDF: 74 KB / 2 pages)

The following entities or individuals are exempt:

No. Subsidiary entities must obtain the appropriate license relating to the type of activities they perform.

The mortgage banking licenses cover all loans secured by a lien or mortgage, or equivalent interest, on real property, with the exception of subordinate loans that are consumer credit transactions, less than or equal to $25,000 amount financed, and have an annual percentage rate (APR) greater than 18%.

If a real estate broker and his or her salespeople find loans or complete loan applications and receive a fee or anything of value for that service separate from the real estate commission described in the agency employment contract, they will be required to register as "mortgage brokers" or "loan originators." If a real estate broker originates, sells or services mortgage loans or land contracts, or provides escrow services, the real estate broker must be registered as a "mortgage banker." Any of the real estate broker’s salespeople who participate in these activities must also be registered.

The mortgage banker or mortgage broker should check with HUD concerning the applicability of RESPA requirements.

Yes, as a Mortgage Banker. Any individuals performing the activities of a loan originator on behalf of the company must also be licensed as loan originators.

No, the division does not license individual branches. However, any individual performing loan originator activities at a branch must be properly registered as a loan originator working on behalf of the mortgage banker or mortgage broker.

No, but there are different financial responsibility licensing requirements for mortgage bankers and mortgage brokers to meet if they do not have a bona fide office in Wisconsin.

According to Chapter 224.71(1b), Wis. Stats., a bona fide office meets all of the following requirements:

An office in your home can be considered a bona fide office if it meets all the requirements above and if it is the only business being run out of your home.

Mortgage bankers with a bona fide office must meet only one of the following requirements (refer to Chapter 224.72(4)(a), Wis. Stats.):

Mortgage bankers without a bona fide office must meet all of the following requirements (refer to Chapter 224.72 (4)(d), Wis. Stats.):

1. Using the Mortgage Banker/Mortgage Broker bond form, file a commercial surety bond for $300,000; and,
2. Submit reviewed or audited financial statements that establish a current minimum net worth of $250,000

Note: "Net Worth" is total tangible assets less total liabilities. Mortgage bankers who are sole proprietors cannot include their principal residence and its furnishings and personal use vehicles in their net worth figure.

"Warehouse Line of Credit" is defined as a line of credit to fund loans held for sale to other persons.

Mortgage brokers with a bona fide office must meet only one of the following requirements, (refer to Chapter 224.72(4m)(a), Wis. Stats.):

1. Using the Mortgage Banker/Mortgage Broker bond form, file a commercial surety bond for $10,000
2. File a personal bond or 3^rd-party guarantee for $10,000 (secured by a certificate of deposit, a debt security acceptable to the Division of Banking, or an irrevocable bank letter of credit from a financial institution authorized to do business in Wisconsin)
3. Submit reviewed or audited financial statements that establish a current minimum net worth of $100,000

Note: Mortgage bankers or mortgage brokers who are sole proprietors cannot include principal residences and its furnishings or personal use vehicles in its net worth figure.

Mortgage brokers without a bona fide office must meet all of the following requirements (refer to Chapter 224.72(4m)(b), Wis. Stats.):

1. Using the Mortgage Banker/Mortgage Broker bond form, file a commercial surety bond for $120,000; and,
2. Submit reviewed or audited financial statements that establish a current minimum net worth of $250,000

No less than a balance sheet that has been reviewed or audited by a certified public accountant. A compiled balance sheet will not be accepted.

 

License Type	Application Fee	Renewal Fee
Mortgage Banker	$1,000.00	$1,000.00
Mortgage Broker	$ 750.00	$ 750.00
Loan Originator	$ 250.00	$ 250.00
Loan Solicitor	$ 250.00	$ 250.00

All licenses are issued for a two-year period.

Yes, they do. Mortgage bankers and mortgage brokers are responsible for the activities of individuals finding loans or negotiating land contracts, loans, or commitments for loans on the mortgage banker or mortgage broker’s behalf. Those performing these types of activities for a mortgage banker or mortgage broker must be licensed as Loan Originators.

The registration form must include the name of the mortgage banker or mortgage broker who will take responsibility for the loan originator. A loan originator may only work for one mortgage banker or mortgage broker at any time. If a loan originator changes employers, a change of employment form must be submitted to the Department of Financial Institutions so that the employee can be transferred to the new mortgage banker or mortgage broker.

Yes. If a loan originator changes employers, they must notify the division. A loan originator may transfer his or her employment to another registered mortgage banker or mortgage broker by application to the division for transfer. The transfer fee is $40. Either you or your new employer can submit the transfer application online at www.pulseportal.com. For those who cannot file a transfer application online, paper applications are available at the WDFI website (www.wdfi.org/fi/mortbank/mbapp.htm)

Mortgage bankers and mortgage brokers can inactivate their affiliation with a loan originator or loan solicitor at www.pulseportal.com. There is no fee for inactivating an association.

The person must register as a mortgage broker or mortgage banker, depending on the types of activities conducted. If the new business is a corporation, partnership or limited liability company, the entity must be licensed as the banker or broker, and the person’s loan originator license should be transferred to the new business. If the person is a sole proprietor, then he or she must register as the mortgage banker or mortgage broker as well as transfer his or her loan originator license to the new mortgage banker or mortgage broker license. In either case, a trade name must be registered with the Department of Financial Institutions.

Licensees should carefully review Section 224.75, Wis. Stats. The minimal retention period is 25 months, which begins on the date the loan is closed or, if the loan is not closed, the date of loan application.

The law states that licensees must deposit in one or more trust accounts all funds (other than non-refundable fees) which they receive on behalf of any person, pending disbursement of the funds in accordance with instructions from the person on whose behalf the funds are deposited. The trust account may be maintained in a bank, savings bank, savings and loan, or credit union that is authorized to do business in Wisconsin or is federally chartered. Chapter DFI-Bkg 42, Wis. Admin. Code, contains other requirements pertaining to types of accounts, time of deposits, commingling funds, and disbursement of trust funds.

The licensees must notify the Department about any business or trade name which differs from the exact name on the licensee’s registration certificate before doing business under this name.

While there are some exceptions in the law, Chapter 138, Wis. Stats., requires mortgagees to pay interest on the escrow accounts of loans originated after January 1, 1994. Lenders must pay a rate published each year in the Wis. Admin. Register.

Yes. For loans that apply to Section 138.052, Wis. Stats., there are various alternatives available to the registrant and the borrower. See Section 138.052 (5m), Wis. Stats.

Effective July 1, 2005, every contract between a mortgage broker and a consumer under which the mortgage broker agrees to provide brokerage services to the consumer must be in writing and on a form prescribed by WDFI. Also effective July 1, 2005, before entering into a contract with a consumer to provide brokerage services, a mortgage broker must give the consumer a copy of a consumer disclosure statement.

The division has created a Mortgage Broker Agreement and Consumer Disclosure Statement that must be used by every Wisconsin mortgage broker and Wisconsin mortgage banker engaged in mortgage brokering activities. Copies of the forms are available at WDFI’s website (www.wdfi.org/fi/mortbank/mbapp.htm), both in a PDF and Word format. The Word format is available so you do not have to retype the form to enter it into your computer system or software program. However, no change to the wording of either form is acceptable or approved. For both forms, the instructions for completing the forms are enclosed in brackets, are preceded by the word “INSTRUCTION,” and are in italics. The instructions are for your benefit and should not be included in your Mortgage Broker Agreement and Consumer Disclosure Statement.

Pursuant to Rule DFI-Bkg 44.01(2), the Mortgage Broker Agreement shall be on white paper sized 8 ½” x 11” and in Times New Roman font style 12 or greater.

Pursuant to Rule DFI-Bkg 44.02(2), the Consumer Disclosure Statement shall be on white paper sized 8 ½” x 11” and in Times New Roman font style 12 or greater.

Yes. For loans that apply to Section 138.052, Wis. Stats., see Section 138.052(7m).

The term of all licenses is two years.

It depends on whether or not your office is a bona fide office, which is defined in question 10 of this overview. If your office meets the definition of bona fide office, fill in the address under the "Wisconsin Office (Bona Fide Only)" column. If you do not have a bona fide office, fill out the "Main Office" column. If you have a bona fide office and a main office as well, fill in both columns as indicated.

You will need to check the portal (www.pulseportal.com) to determine when your renewal application is approved. If you need to prove you are licensed, you (or anyone else who wants to know) can get the necessary verification by going to the portal and searching by your name or license number.

As is true with other licenses in the Department, the Department may revoke, suspend or limit a license or it may reprimand a mortgage banker, mortgage broker, or loan originator. The Department also has additional authority to issue general and special orders necessary to prevent or correct actions by its registrants.

Yes. Chapter DFI-Bkg 43, Wis. Admin. Code, contains provisions relating to improper, fraudulent or dishonest dealing and provides 14 examples of incompetent practice.

Yes. These changes should be reported in writing from the company or legal counsel within 30 days.

A loan originator may submit written notification of the name change explaining the reason for the change, along with their original license certificate, which will be replaced by the division.

A mortgage banker or mortgage broker licensee should submit written notification along with a copy of the amended articles of organization, a rider to the Wisconsin Mortgage Banker/Mortgage Broker bond or letter of credit (if applicable).

A trade name, also known as “dba,” is an additional name under which a mortgage banker or mortgage broker might wish to conduct business. The division does not allow trade names to contain organizational identifiers, such as “Inc.”, “Corp.”, “Co.”, “LLC”, or “LP”, etc.

You may register a trade name with the Office of Secretary of State. Please be aware that registering a trade name with the Secretary of State does not allow a licensee to use a trade name under its mortgage banking license. The Division of Banking must receive a written request from the mortgage banker or mortgage broker indicating the trade name they wish to use.

You may also telephone our office at (608) 261-7578.