Can I originate commercial mortgage without license?

Question

Hello Mortgage Gurus,

I opened up a book on amazon.com titled "The Art of Commercial Brokering" authored by E. F. Dupuy, and I read from it that someone can work as a Commercial Mortgage Broker or Commercial Mortgage Originator WITHOUT a license all over America, except in California.

Is this truth? Happy New year all and happy holidays.

Thank you all.

Sincerely,

Larry

Jay Hinrichs · Answer

@Lawrence Monyei  maybe instead of trying to figure out if you don't need a license and you want to be in the mortgage origination business why don't you just get a license then you don't have to worry about it.. Not that hard or expensive and would open a bunch of avenues.. although I will say the NMLS test is quite a bit harder than a RE brokers test. I had a partner that is an attorney and he failed it first time.. I passed first time but not by much and I have 40 years at this.. LOL

I think many of the threads here on BP is based on how to get around licensing when if you truly want to get into the business just get licensed and not worry about it.

If your licensed especially in lending you will have much better creds..

so if your going to broker means your going to have to have a lender that will let you make a fee unless you know some really rich folks with a ton of cash this means you need to talk with established lending companies  and most will not deal with uinlicensed folks so its a non starter right there.

Like Lendinghome.com  I got approved by them but I had to show them my NMLS license they won't work with those that are not properly licnesed

Jay Hinrichs · Answer

@Mark Creason  You would know better than me.. so I should qualify my answer as saying in Orygun.. you don't need a license for commercial purpose loans on NON 1 to 4's 1 to 4 no matter the purpose or whose money it is etc needs NMLS

I think there are 17 states that interpret the 1 to 4 the same way.. I know NV is one.

so I probably got ahead of myself saying that Land loans or multi family loans were expemt in most if not all states. I know for sure they are in Oregon and WA.

In WA you can even do one to four if its commercial purpose.

I think what one needs to do is to simply check with the mortgage lending division of the state you want to work in and they will tell you what activity requires a license and what does not..   My bad on that one.

Mark Creason · Answer

AZ CA and NV require licensing.  May be more.

Mark

Account Closed · Answer

I don't believe a you need any license in CA if you lend your own money for business purposes (e.g. a flipper) that doesn't violate usury.  You are usually right Jay, so I'm wondering what makes you say that?

I take that back partially, if you make more than 8 loans in a year you need a license.

Lawrence Monyei · Answer

I also came across it in another book titled "Getting Started as a Commercial Mortgage Broker" by Peter J. Gineris, that someone don't need licensing in most states in America to work as a commercial mortgage broker or commercial mortgage/loan originator.

Jay Hinrichs · Answer

@Mark Creason  my NMLS licnese is for Oregon  ( inactive status at the moment since I am not doing any loans)... I did take the UTS test and passed it.. So all I have to do to get a license in any other state is to pay the money and or do the simple state test I don't have to do the full federal test.

Every state is different of course. .With Nevada being a stickler,  I had an opp to do some loans in Vegas and I put a spot on marketplace looking for a broker to do those for me ( nmls compliance)  and someone either turned me in  ( some BP broker from Vegas) or the state was trolling the site.. and I got a nasty gram from the Nevada lending division informing me that to do laons in their state required licensure .. I had to do an affidavit affirming I had never done a loan in NV and if I do I will get properly licensed.

Mark Creason · Answer

What states do you work in, and have you received an NMLS license?  What does Texas require?

Jay Hinrichs · Answer

@Lawrence Monyei  Generally true... what defines a commercial loan?

1.  Land

2. vertical construction

3. 5 units or more of residential

4. MHP  storage units

5. business and retail commercial etc.

So basically anything that is not  1 to 4 units  and of course Nothing to owner occ for resi purposes.  And you can broker others money does not have to be your own.

However so much of the industry is focused 1 to 4 units  so that is were the licensing comes in...

CA you need a RE brokers licensee or NMLS  and not sure on pure commercial. As I have a CA brokers license and NMLS  personally

David Dachtera · Answer

My question would be:

Do you have enough knowledge / experience / etc. to overcome the credibility deficit of not having the credentials?

David J Dachtera

"Success is not a destination. Failure is not an event. Success is a process, failure is a choice."- DJ Benedict

John Thedford · Answer

As long as it is not prohibited in your state, yes. Commercial mortgages are also exempt from Dodd-Frank. You might get a more detailed response @Jay Hinrichs

BTW, this is assuming you are lending YOUR money and not a third parties money. Representing others more than likely requires a license no matter the type of loan.

Can I originate commercial mortgage without license?

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