See below for DFI's answers to questions frequently asked about Loan Processors.
I work as a Loan Processor. Must I have a Loan Originator or Mortgage Broker license as of January 1, 2007?
- You will not have to be licensed with DFI under the following scenarios:
- You are a W2 employee Loan Processor for a licensed mortgage broker(s). Generally, you must work from a licensed location (main or branch office). See WAC 208-660-300(14) for more information.
- You are a W2 employee Loan Processor for a loan processing company that has a mortgage broker license. Generally, you must work from a licensed location. See WAC 208-660-300(14) for more information.
- You must have a license with DFI under the following scenarios:
- You must have a loan originator license if you work as an independent contractor Loan Processor (receive a 1099) for a licensed mortgage broker. You must work from a licensed location under the mortgage broker license.
- You must have a loan originator license if you work as an independent contractor Loan Processor (receive a 1099) for a loan processing company. You must work from a licensed location under the loan processing company's mortgage broker license.
- You must have a mortgage broker license if you own a processing company that independently contracts (receives a 1099) with licensed mortgage brokers to process loans. Your W2 employees and independent contractors (1099 paid workers) must work from a licensed location. Your independent contractors must be licensed as loan originators.
Currently as a Loan Processor, I get paid directly from the closing table - not a W2 and not a 1099 - where do I fit in this guidance?
Only the licensed mortgage broker and bona fide third party service providers may be paid from the closing table.
- If you choose option 2a above, the "processing fee" will be paid at closing to the mortgage broker who will in turn pay you (as a licensed loan originator) - then report your payments to the IRS on a 1099.
- If you choose option 2c above, the processing company that holds a mortgage broker license may be paid the "processing fee" at closing. Then the processing company will pay its workers.
I'm an independent contractor Loan Processor working from one mortgage broker company’s licensed branch office, but I want to process loans for many mortgage brokers at this location. Does each mortgage broker company need to license this location as a branch, or because it's already a licensed location may I just relate my loan originator license to the many mortgage brokers and keep working just from this location?
The loan documents for each mortgage broker must be handled at a licensed location. Any of these options are acceptable:
- Each mortgage broker company may license your location as a branch.
- Each mortgage broker may enter into a processing contract with the company holding the mortgage broker branch license at your location.
- You may travel from location to location so you process each mortgage broker company’s loans at that company’s licensed location(s).
I am an independent contractor Loan Processor working from a mortgage broker company’s licensed branch office. May I process loans for other mortgage brokers from this location?
Once you receive your loan originator license, either of these options is acceptable:
- Each additional mortgage broker company for whom you provide loan processing services may license the location as a branch. You must establish a W-2 or 1099 relationship with each of those mortgage brokers.
- Each additional mortgage broker company for whom you provide loan processing services may enter into a contract with the mortgage broker company holding the branch license at that location.
How must Loan Processors handle loan files?
Follow these guidelines when processing loan files:
- Loan files must always reside at a licensed location. The location can be a branch of the mortgage broker’s office or a separate processing office licensed under the act.
- A licensed loan originator processing files for more than one mortgage broker can process the loan files at each mortgage broker’s main or branch office, moving from company to company. Or the licensed loan originator can open an office that is licensed as a branch of each mortgage company with whom they contract to process loans.
- If the Loan Processor creates and keeps a duplicate loan file, that file must be consistent with the original file kept by the mortgage broker.
- Files may be kept in paper form or in a variety of electronic media. The originating mortgage broker is the owner of the mortgage file and is required to keep the file for a minimum of twenty-five months.