Division of Banking and Financial Institutions

Montana Law Requires Licensing of Mortgage Bankers

HELENA, MONTANA – Annie Goodwin, Commissioner of the Montana Division of Banking and Financial Institutions, announced that the Montana Legislature passed a law, which requires the licensing of mortgage bankers. The law amends the Montana Mortgage Broker and Loan Originator Licensing Act. On April 20, 2005, Governor Brian Schweitzer signed Senate Bill 274 into law requiring mortgage bankers providing mortgage broker services to obtain licensure with the Montana Division of Banking and Financial Institutions of the Department of Administration.

Effective October 1, 2005 the Act requires those mortgage bankers and their loan originators engaged in mortgage brokering activities to obtain appropriate licensure. A mortgage broker is defined as a person or entity that provides services for a fee as an intermediary between a borrower and lender in obtaining financing for the borrower that is to be secured by a residential dwelling on real property with a loan provided by the lender. A physical location in Montana is a requirement for licensure.

“The changes enacted by SB 274 will provide greater protection to Montana consumers,” stated Commissioner Annie Goodwin. “Mortgage bankers required to apply for licensure will be subject to the stringent licensing requirements set forth by the Montana Mortgage Broker and Loan Originator Licensing Act.”

Mortgage bankers should also be aware that Montana law requires licensure for table funding. Any person or entity not exempted from the Act, who closes a mortgage loan naming themselves as the lender and who, within three days of closing consummates sale of the mortgage loan to another party must be licensed as a mortgage broker.

The division will begin accepting applications on July 1, 2005. For more information about the Montana Mortgage Broker and Loan Originator Licensing Act please contact the division at 406-841-2920 or visit the division’s mortgage broker website at http://www.mt.gov/doa/banking/mortgage.mcpx. The final version of SB 274 can be found on the website of the Montana State Legislature at http://www.leg.mt.gov.  Press Release