Colorado

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Regulators

Attorney General:Ken Salazar

Department of Regulatory Agencies
Division of Real Estate
1560 Broadway, Suite 925
Denver, Colorado  80202


Phone: (303) 894-5953
Fax: (303) 894-7885
http://www.dora.state.co.us/real-estate/
http://www.dora.state.co.us/real-estate/licensing/education/MB/
brokereducation.htm
PSI Candidate Handbook
DPOS Approval Letter
Affidavit of Eligibility

OVERVIEW

The Division of Real Estate is the licensing, regulation and enforcement agency for the real estate broker, appraiser and mortgage broker industries.

“The Mortgage Broker Licensing Act” formerly known as “The Mortgage Broker Registration Act”, has been signed into law and is effective January 1, 2008. It requires a mortgage broker to be licensed rather than registered now. A person may not broker a mortgage, offer to broker a mortgage, act as a mortgage broker or offer to act as a mortgage broker without obtaining licensure.

IMPORTANT NOTICE:

The Division of Real Estate issued “Position Statement MB 1.3 – Licensing Required” in response to industry confusion regarding who must be licensed under the new law:

According to the statement, the Director of the Division of Real Estate interprets the new licensing requirement to include persons who directly supervise individuals who negotiate, originate, or offer or attempt to negotiate or originate for a borrower, for a commission or other thing of value, a residential mortgage loan to be consummated and funded by a mortgage lender. In contrast, individuals who perform purely administrative or clerical tasks do not fall within the licensing requirement.

HIGHLIGHTS

Required Participants

Mortgage Brokers

Registered and/or Licensed with the State

Yes

Brick and Mortar State

No, but a foreign company must register, with the SOS, the company and an agent in the state in order to conduct business in Colorado.

Education

Initial

The Colorado Division of Real Estate has issued Emergency Rule 4 CCR 725-3

Effective December 1, 2008, provides an extension for mortgage brokers who have not satisfied the Division’s education and testing requirements before the January 1, 2009 deadline.
Mortgage brokers requesting an education extension must complete the Division’s education extension form, available at http://www.dora.state.co.us/real-estate/mortgage/MBForms.htm , pay a $100 extension fee by money order or cashier’s check, request that the Director inactivate their mortgage broker license if they fail to pass the written test by March 31, 2009, and provide the Director with an original copy of the required surety bond, power of attorney, and proof of insurance associated with the license.

Because many mortgage brokers have failed to comply with the education and examination requirements, licensees are able to apply for the above extension, but must now pass with a 75% rather than a 70%
Failure to comply with the education and exam requirements and failure to apply for an extension will, at a minimum, increase the licensee’s renewal fees by $500

On or after January 1, 2009, each individual applicant for initial licensure as a mortgage broker must complete, within the 3 years immediately preceding the date of application, 40 hours of licensing education and pass a two-part exam prior to applying for a mortgage broker license.

Mortgage broker applicants and licensees must receive a certificate of completion from their education provider evidencing the successful completion of the respective licensing education course work before scheduling and completing the exam with PSI.
The examination consists of two parts. They include Federal and State Law and Mortgage Lending Basics.

Continuing

Currently, a minimum of 9 hours of fundamental mortgage lending coursework must be completed every 3 year licensing period to satisfy the continuing education requirement AND a corresponding written examination must be passed.
Additionally, every person that currently maintain a Colorado mortgage broker license must complete 40 hours of licensing education and pass a two-part licensing examination by January 1, 2009.

The examination consists of two parts. They include Federal and State Law and Mortgage Lending Basics.

Proctored Course

Proctored Test

Yes. The PSI administered test will consist of 100 questions; 30 state and 30 federal law questions as well as 40 general questions covering mortgage lending basics.

Retesting Standards

On or after January 1, 2009 any individual may retake the test at least 3 consecutive times. Each retake must be at least 30 days after the preceding test was taken. After that, the individual must wait at least 6 months to retake the test.

Approved Delivery Methods

Live & Online

Licensing

On and after January 1, 2008, all mortgage brokers conducting business in this state must be licensed with the Division of Real Estate prior to acting as a mortgage broker unless they are considered exempt. Prior to 2008 all mortgage brokers must be registered with the Division.

You may submit your application online at https://eservices.psiexams.com/index_login.jsp. It will take up to 21 days to process a complete application. A complete application consists of:

A legible and complete application
A $25,000 surety bond already into effect
A criminal history record
An application fee

NOTE: A set of fingerprints for the criminal history record must be submitted to the Colorado Bureau of Investigation (CBI) prior to application. This takes approximately 3 months to process, so plan accordingly.

Note the following exemption qualifications:

Under circumstances listed below, Director Erin Toll grants reprieve from the Mortgage 101 and Business and Trade Practices portion of the coursework and the General portion of the examination.

To qualify for the exemption, mortgage brokers must meet all five requirements:

Currently maintain a mortgage broker license.
A member of a mortgage broker association approved for exemption by the Division of Real Estate.
Maintain a mortgage broker association designation that is current and in good standing.
Provide the letter of certification to the education course provider prior to completing coursework.
Provide the letter of certification to PSI prior to taking the exam.

"Currently only members of the Colorado Association of Mortgage Broker (CAMB) meet the exemption qualifications. CAMB members must contact CAMB for more information."

Mortgage brokers who qualify for the exemption must complete the 19.5 hours of the State and Federal Law portion of the coursework and pass the State and Federal Law portion of the exam.

License Expiration:

3 years from the date of application

Fees:

$200 application fee
$39.50 criminal history record fee
Renewal fees have not been determined yet.

Effective November 24, 2008: The Department has decided to increase their licensing fees after experiencing a dramatic loss in revenue due to an unanticipated drop in license applications. The new fees are as follows:

Original License/Broker Application $500
Renewal - Broker (three-year) $300
Reinstatement - Broker in 1st Year $450
Reinstatement - Broker in 2nd Year $600
Transfer Fee - Broker $50

Bond Requirements:

A $25,000 surety bond is needed to apply for a Mortgage Broker license and the bond must be made effective before completing the online application.

Every mortgage broker licensee must maintain an errors and omissions policy. The previous deadline of January 1, 2008 has been pushed back to January 31st to give providers more time to comply of this emergency rule. The primary guidelines are as follows:

The deductible has been increased from $5,000 to $10,000
Coverage must encompass all transaction types conducted by the mortgage broker
Coverage of no less than $100,000.00 for each licensed individual per covered claim, with an annual aggregate limit of not less than $300,000.00 per licensed individual is required.

Please Note: The information on this web page should not be construed as legal advice, but for informational purposes only. For up-to-date state information and regulations, please visit your state’s website.

State Required Education