By the Division of Banks


1.0          APPLICABILITY AND SCOPE

The purpose of this Regulatory Bulletin is to formalize experience requirements that applicants for licensure as mortgage lenders and mortgage brokers must satisfy in order to obtain such a license pursuant to G.L. c. 255E and 209 CMR 42.00 et seq.  This Bulletin applies to all individuals and entities applying for licensure as mortgage lenders and mortgage brokers, as well as individuals who will hold positions of significant responsibility involved with the mortgage lending or brokering process.  This Bulletin shall not apply to applicants seeking renewal of such licenses.

This Bulletin is also intended to clarify the pre-licensing education requirements that mortgage loan originator license applicants must satisfy in order to apply for such license pursuant to G.L. c. 255F and 209 CMR 41.00 et seq. These educational requirements will familiarize applicants with the state and federal laws and regulations governing the mortgage origination and lending industry, consumer lending concepts, ethics, and origination practices and processes.

2.0          POLICY

2.1.  Mortgage Brokers and Mortgage Lenders

To obtain a license as a mortgage broker or mortgage lender from the Division, an applicant must satisfy the requirements of 209 CMR 42.06(2) or 209 CMR 42.03(2). Included within the license requirements of these sections is (d) Business Experience, which states that “[a]n applicant shall demonstrate to the Commissioner's satisfaction that the Applicant, and its applicable officers and employees, possess the necessary educational and business experience to engage in the business of a mortgage lender [or a mortgage broker].”

The following standards shall satisfy the business experience requirements:

2.1.1.     Mortgage Brokers

An applicant for a mortgage broker license shall provide evidence, as of the filing of the application, of three years of full-time experience, or the equivalent in part-time experience, working for a licensed mortgage broker, mortgage lender, or financial institution exempt from licensing under G.L. c. 255E, or a similar institution licensed or chartered in a state other than Massachusetts. Such experience shall have been in a position from which the applicant would have gained a familiarity with the responsibilities of a mortgage broker, including the opportunity to gain a working knowledge of the laws governing mortgage transactions. Such experience shall have been in a position from which the applicant was compensated directly by: a mortgage broker or mortgage lender licensed under G.L. c. 255E; by a financial institution that was exempt from licensing under G.L. c. 255E; or by a similar institution licensed or chartered in a state other than Massachusetts. The Division will not grant consideration to any business experience that was gained by the applicant while working for: (i) an unlicensed entity or individual which during the relevant time was required to maintain a license under G.L. c. 255E or (ii) an unlicensed branch office location of a licensed entity or individual.

2.1.2.     Mortgage Lenders

An applicant for a mortgage lender license shall demonstrate, as of the filing of the application, five years of full-time experience, or the equivalent in part-time experience, working for a licensed mortgage lender, mortgage broker, or financial institution exempt from licensing under G.L. c. 255E, or a similar institution licensed or chartered in a state other than Massachusetts. Such experience shall have been in a position from which the applicant would have gained a familiarity with the responsibilities of a mortgage lender, including the opportunity to gain a working knowledge of the laws governing mortgage transactions. Such experience shall have been in a position from which the applicant was compensated directly by: a mortgage broker or mortgage lender licensed under G.L. c. 255E; by a financial institution that was exempt from licensing under G.L. c. 255E; or by a similar institution licensed or chartered in a state other than Massachusetts. The Division will not grant consideration to any business experience that was gained by the applicant while working for: (i) an unlicensed entity or individual which during the relevant time was required to maintain a license under G.L. c. 255E or (ii) an unlicensed branch office location of a licensed entity or individual.

2.1.3.     Branch Managers

The experience requirement established by this Bulletin shall require that any individual designated as a Branch Manager of a mortgage broker or a mortgage lender shall likewise provide evidence of three years of business experience in accordance with the standards set forth above as a condition of obtaining approval from the Division to perform in the capacity of a Branch Manager.

2.1.4.     Petition for Consideration of Alternative Education or Experience

Any applicant who wishes to present experience and/or education which is not in accordance with this Regulatory Bulletin may petition the Commissioner to consider alternative education or experience which the applicant feels would satisfy the experience requirement for applicants. Such petition shall include documentation of the experience or education at issue and its relationship to mortgage activities.

2.2.  Mortgage Loan Originators

To obtain a license as a mortgage loan originator from the Division a prospective applicant must satisfy the pre-licensing coursework requirement of 209 CMR 41.04(2)(e), which states that “[a]n Applicant shall submit information demonstrating that he/she has completed a minimum of 20 hours of pre-licensing education, approved by the NMLS which shall include, without limitation: (i) 3 hours of federal law and regulations; (ii) 3 hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issues; (iii) 2 hours of training related to lending standards for the nontraditional mortgage product marketplace; and (iv) 3 hours of state law and regulation, which shall include instruction on state consumer protection laws and other related statutes.”

An applicant who previously completed an NMLS approved pre-licensing education course to obtain a mortgage loan originator license in another state, which did not include a Massachusetts education component, will be required to demonstrate completion of 3 hours of pre-licensing education on Massachusetts laws and regulations.

The annual renewal of the mortgage loan originator license will require that the license renewal applicant demonstrate completion of 8 hours of continuing education coursework approved by the NMLS, including 1 hour on Massachusetts laws and regulations, in accordance with 209 CMR 41.08.

3.0          HISTORICAL NOTES

This bulletin was first issued on May 15, 1998 to formalize standards which the Division has used as guidance in licensing under G.L. chapter 255E. The bulletin was revised in 2002 as a result of amendments to G.L. c. 140 by Chapter 50 of the Acts of 2000. Additional amendments to the bulletin were published for comment on May 17, 2007, and finalized on July 2, 2007, to implement the recommendations of two Working Groups which were formed as a result of a Mortgage Summit meeting attended by participants from government agencies, non-profit organizations, and the mortgage lending industries.  The bulletin was further revised, effective July 31, 2015, to clarify the licensing education requirements that an applicant for a mortgage loan originator license must satisfy prior to submitting a license application. 

4.0          AUTHORITY

G.L. c. 255E; G.L. c. 255F; 209 CMR 42.00, et seq.; and 209 CMR 41.00, et seq.