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.

In May of 2009 the governor signed HB 09-1085 into law to bring the state in compliance with the SAFE Act of 2008 and the resulting change in licensing requirements.

All mortgage loan originators described in Category 2 must be licensed as State-Licensed Loan Originators by July 31, 2010. Colorado's transition date for the Nationwide Mortgage Licensing System and Registry is January of 2010. As a result, the registration process for individuals seeking to become licensed as state-licensed loan originators in Colorado begins in January of 2010.

HIGHLIGHTS

Required Participants

Mortgage Brokers and mortgage loan originators

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

On or after January 1, 2009 and prior to January 1, 2010 each individual applicant for initial licensing as a mortgage loan originator must complete (within the 3 years immediately preceding the date of application) 40 hours of licensing education, offered in a manner prescribed by the Director, before applying for a mortgage loan originator license. The general requirements of the 40 hour fundamentals course must consist of at least:

19.5 hours of Federal and State Law
16 hours in Mortgage 101
4.5 hours of Business and Trade Practices

Note: This must be classroom instruction or an equivalent distance learning course that has the functionality to ensure the student spends the same amount of time online as they would in a traditional classroom setting.

On or after January 1, 2010 each individual applicant must complete (within the 3 years immediately preceding the date of application) 20 hours of NMLS approved pre-licensing education which must contain at least:

The specific content requirements are not available yet. Refer to the general SAFE requirements.

All new applicants on or after December 31, 2009 must complete 20 hours of NMLS approved PE
Certification: Currently licensed MLO’s who have at least 20 hours of CO state approved education on or before December 31, 2009 may be eligible to participate in the PE certification process and may not need to take the NMLS approved PE. Refer to your state agency for more information

Testing

All individuals licensed prior to January 1, 2010 must pass the national portion of the two part NMLS exam in order to register on the NMLS and become a state licensed LO.

Prior to January 1, 2010 the two parts of the exam will include the Federal, State and Consumer Protection Laws portion and the Mortgage Lending Basics and Ethics portion
Applicants must obtain a 75% on both portions to pass the exam.

On or after January 1, 2010 each individual applicant must pass the two part exam developed and administered by the NMLS or an approved company.

On or after January 1, 2010 the two parts of the exam will include a national component and a Colorado state specific component
Applicants must pass in accordance with the NMLS policies and procedures

An individual may retake a test 3 consecutive times at least 30 days apart. If they fail on the third attempt they must wait at least 6 months to retake it

All new applicants approved on or after January 1, 2010 must pass the National AND State component prior to their application being approved
Existing licensees as of January 1, 2010 must pass the National component by July 31, 2010
Certification: Currently licensed MLO’s who have passed the CO mortgage test no later than December 31, 2009 may be eligible to participate in the testing certification process and may not need to take the CO State component. Refer to your state agency for more information

Continuing

The continuing education (CE) requirements for individuals licensed prior to January 1, 2009 begin after their first license renewal.

Those licensed prior to January 1, 2009 must complete at least 8 hours of NMLS approved continuing education each year AND a 2 hour annual Colorado specific state update course reviewed and approved by the Division each calendar year prior to subsequent license and registration renewals

The continuing education (CE) requirements for individuals licensed on or after January 1, 2009 begin after issuance of the initial license.

Those licensed on or after January 1, 2009 must complete at least 8 hours of NMLS approved continuing education each year AND a 2 hour annual Colorado specific state update course reviewed and approved by the Division prior to license and registration renewal

All licensees must complete 8 hours of NMLS approved CE and 2 hours of State approved CE in 2010 in order to renew for 2011

Note: Passage of the national portion of the NMLS exam shall satisfy one year of CE–if CE is required in the year in which the individual has passed the national portion of the exam.

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.

Approved Delivery Methods

Live & Online

Licensing

An individual cannot originate a mortgage loan or engage in the activities of a mortgage loan originator after July 31, 2010 unless licensed by the state and registered with the NMLS.

Independent contractors may not engage in mortgage loan origination activities as a loan processor or underwriter unless licensed as well.

Applicants for licensure must submit the following:

A set of fingerprints so a state and national criminal history record check can be conducted

Existing licensees must submit fingerprints through NMLS by July 31, 2010.
All new applicants as of January 1, 2010 must submit fingerprints through the NMLS and the state of Colorado upon application.

Personal history and experience and authorization to obtain an independent credit report and information relating to any administrative, civil, or criminal findings by a government jurisdiction

All licensees will be required to authorize a credit report through the NMLS between October 2010 and March 1, 2011.

License Expiration:

The license renewal period begins November 1st of each calendar year and ends December 31st of each calendar year.

For licenses set to expire at any point in 2009, the Director will administratively change the expiration date to December 31, 2009
For licenses set to expire on or after January 1, 2010, the Director will administratively change the expiration date to December 31, 2010

Fees:

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:

Mortgage Loan Originators = $25,000

Mortgage Brokers = $25,000

Plus, every mortgage broker licensee must maintain an errors and omissions policy. 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 Licensing

Financial Strategies presents together with

State Required Education