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Mortgage Broker Licensing Procedure

 

NOTE: Most mortgage brokers must register with the Colorado Division of Real Estate while very few must register with the Colorado Division of Securities.

 

Information regarding mortgage broker registration is available from the Colorado Division of Real Estate at:

http://dora.colorado.gov/dre
303-894-5953

 

Those mortgage brokers who raise money from individual investors to fund mortgage loans would need to be licensed under the state securities laws with the Colorado Division of Securities. Please review the following information before you apply for a Colorado Securities Division Mortgage Broker-Dealer license.

 

General information Regarding Mortgage Broker-Dealers

Rule 51-4.1:


(e) A mortgage broker-dealer whose business is limited exclusively to effecting transactions with financial institutions [as defined in section 11-51-201(6), C.R.S.] is exempt from the licensing requirements of section 11-51-401(1), C.R.S.



11-51-201(6),(C.R.S.) "Financial or institutional investor" means any of the following whether acting for itself or others in a fiduciary capacity:

(a) A depository institution;

(b) An insurance company;

(c) A separate account of an insurance company;

(d) An investment company registered under the federal "Investment Company Act of 1940";

(e) A business development company as defined in the federal "Investment Company Act of 1940";

(f) Any private business development company as defined in the federal "Investment Advisers Act of 1940";

(g) An employee pension, profit-sharing, or benefit plan if the plan has total assets in excess of five million dollars or its investment decisions are made by a named fiduciary, as defined in the federal "Employee Retirement Income Security Act of 1974," that is a broker-dealer registered under the federal "Securities Exchange Act of 1934", an investment adviser registered or exempt from registration under the federal "Investment Advisers Act of 1940", a depository institution, or an insurance company;

(h) An entity, but not an individual, a substantial part of whose business activities consist of investing, purchasing, selling, or trading in securities of more than one issuer and not of its own issue and that has total assets in excess of five million dollars as of the end of its latest fiscal year;

(i) A small business investment company licensed by the federal small business administration under the federal "Small Business Investment Act of 1958"; and

(j) Any other Institutional Buyer.


A mortgage broker-dealer whose business is not limited exclusively to placing mortgage loans with institutional investors is subject to the mortgage broker-dealer licensing requirements under the state securities laws. Therefore, a mortgage broker-dealer who raises money from individual investors to fund mortgage loans would need to be licensed under the state securities laws.


When applying for a Mortgage Broker-Dealer and/or Sales Representative license(s), file the following at the Colorado Division of Securities, 1560 Broadway, Suite 900, Denver, CO 80202.


  1. Filing fees are required for a mortgage broker-dealer license and for each sales representative license. Make your check payable to the Colorado State Treasurer. Refer to the Fee Schedule for appropriate fee requirements.

  2. Form BD.

  3. Undertaking - Mortgage Brokers.

  4. Agent application Form U-4 for each person who will represent the firm in Colorado as sales representative and proof that applicant has passed the Uniform Securities Agent State Law Examination (Series 63).Individuals who are licensed as a real estate broker or salesman are excused from this examination requirement.When filing, provide proof of real estate licensure.Request a Uniform Qualifications

  5. Examinations Form (Form U-10). The Form U-10 and examination fees should be submitted to the National Association of Securities Dealers, Inc. (address on the form) and not to the Colorado Division of Securities.At lease one person must be designated as primarily responsible to supervise all licensed sales representatives. The box named "Other" under Item 11 of Form U-4 should be marked. Then insert the phrase "Designated Supervisor."

A mortgage broker-dealer who maintains possession or control of investor funds or securities must meet certain financial responsibility requirements. The options for requirements are listed in Rule 4.6B. At the time of application for license, provide proof of compliance with such requirements, if applicable.

 

 

 

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1560 Broadway, Suite 900, Denver, CO 80202 Email
(303) 894-2320 - Phone (303) 861-2126 - Fax