How to Form a Mortgage Company in Oklahoma | Essential Steps

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Oklahoma Mortgage Company

The mortgage industry plays a crucial role in the economy as it facilitates the dream of homeownership of Oklahoma people. Forming a mortgage company can be a rewarding and profitable LLC in Oklahoma. However, it requires a deep understanding of the industry, regulatory requirements, and the necessary steps to establish and run a successful mortgage company. This comprehensive guide will walk you through Forming a Mortgage Company in Oklahoma and provide valuable insights to help you succeed in this competitive industry.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before forming your Oklahoma mortgage company, all the steps in this article must guide you.

How to Form a Mortgage Company in Oklahoma

What is a Mortgage Company?

In Oklahoma, a mortgage company is a business, often structured as a Limited Liability Company (LLC), that specializes in originating, funding, and servicing mortgage loans for homebuyers and property owners. These companies play a crucial role in the local housing market as they facilitate obtaining a mortgage loan for individuals looking to purchase, refinance, or invest in residential properties.

The Oklahoma State Banking Department regulates mortgage companies in Oklahoma and must obtain the appropriate licenses to operate legally. There are different types of mortgage companies, such as mortgage brokers, lenders, and loan originators, each with specific roles and responsibilities within the mortgage industry.

  • Mortgage brokers act as intermediaries between borrowers and mortgage lenders, assisting homebuyers in finding the Best Oklahoma Small Business Loan product and terms to suit their needs.
  • Mortgage lenders are financial institutions that provide the funds for mortgage loans directly or through a network of mortgage brokers.
  • Mortgage loan originators are individuals employed by mortgage companies who work with borrowers to process and submit loan applications, negotiate loan terms, and complete the mortgage transaction.

Operating a mortgage company in Oklahoma requires a deep understanding of the local housing market, industry regulations, and the various mortgage products available to borrowers. By providing valuable services and expertise to homebuyers and property owners, mortgage companies in Oklahoma play a vital role in helping individuals achieve their homeownership dreams and supporting the state’s overall economy.

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How to Form a Mortgage Company in Oklahoma

Forming a mortgage company in Oklahoma can be complex, but the following step-by-step guide will help you navigate the requirements and regulations.

Step 1: Understanding the Mortgage Industry

The mortgage industry in Oklahoma is governed by various state and federal laws and regulations designed to protect consumers and ensure a fair and stable market—the primary regulatory authority for mortgage companies in Oklahoma State Banking Department. The Oklahoma State Banking Department is responsible for licensing and regulating mortgage companies and their activities within the state.

Before starting a mortgage company in Oklahoma, it is essential to understand the different types of mortgage licenses and activities regulated by the Oklahoma State Banking Department. These include:

Mortgage BrokerA person or entity that, for compensation or gain, assists borrowers in obtaining mortgage loans from third-party lenders.
Mortgage LenderA person or entity that originates, funds, or services mortgage loans.
Mortgage Loan Originator (MLO)An individual who, for compensation or gain, takes mortgage loan applications or offers or negotiates terms of mortgage loans.

It is suggested that you speak with a legal professional before you begin setting up a mortgage company. They’ll understand what’s best for you and your future company. To safeguard your personal assets from business debts, you can always start an LLC in Oklahoma.

– WEBINARCARE EDITORIAL TEAM

Step 2: Forming a Legal Entity

Once you clearly understand the mortgage industry and the specific license type you want to pursue in Oklahoma, the next step is to form a legal entity for your mortgage company. The most common types of legal entities for forming a mortgage company in Oklahoma include:

Sole Proprietorship

This is the simplest form of business entity, where an individual operates the Oklahoma mortgage company under their name or a trading name. There are no formal registration requirements, but the owner is responsible for all business debts and liabilities.

Partnership

A partnership is a business entity where two or more individuals come together to form a mortgage company. All partners are personally liable for the business’s debts and liabilities in a General Partnership. Limited Partnerships and Limited Liability Partnerships offer some protection for partners from personal liability.

Limited Liability Company (LLC)

An LLC is popular for forming a mortgage company, combining a corporation’s liability protection with a partnership’s tax flexibility. LLC owners, known as members, are not personally liable for the business’s debts and liabilities. 

Corporation 

A corporation is a legal entity separate from its owners, known as shareholders. Starting a corporation in Oklahoma provides liability protection for its owners and is subject to corporate taxation. Forming a corporation involves more administrative requirements and fees than other business structures. There are different types of corporations, such as S and C corporations, each with tax implications and requirements.

To form a mortgage company in Oklahoma, consult a Business Attorney in Oklahoma to understand the state’s requirements for forming a legal entity and obtaining necessary licenses and permits.

Step 3: Developing a Business Plan

A well-crafted business plan is essential for the success of your Oklahoma mortgage company. The business plan should outline your company’s mission, vision, objectives, target market, competitive analysis, marketing strategy, financial projections, and management structure.

Your business plan will serve as a roadmap for your company’s growth and help you secure financing or investment to start and grow your business.

Step 4: Register Your Mortgage Company

You must register your Oklahoma mortgage company. Here are the guidelines you must accomplish before obtaining the licenses and permits.

Choose a Business Name

Choosing a business name for your Oklahoma mortgage company involves several steps. Here are some guidelines to help you choose an effective name:

  • Your business name should reflect the brand identity you want to convey to your potential clients. Consider your target audience, your company’s values, and the services you offer when choosing a name.
  • Including words related to the mortgage industry in your business name can help potential clients understand the nature of your business. Some keywords to consider are “mortgage,” “loan,” “home,” “finance,” or “lending.”
  • Including the name of Oklahoma in your business name can help establish a sense of familiarity and trust with potential clients from the same state. For example, “Oklahoma Mortgage Solutions” or “Oklahoma Home Loan Experts.”
  • A shorter, easy-to-remember name can make it easier for potential clients to recall your business when they need mortgage services.

Remember to check the availability of your chosen business name with the Oklahoma Secretary of State Business Entity Search to ensure that no one else has trademarked the name. There is a complete guide on Oklahoma Business Name Search for you to have a mortgage company name. You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for Oklahoma DBA (doing business as). 

Once you’ve settled on a unique name, you can proceed with choosing a Registered Agent down to obtaining any required licenses and permits.

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Choose a Registered Agent

A Registered Agent is a person or entity designated to receive important legal documents and correspondence for your business. In Oklahoma, every business entity, such as an LLC or a corporation, must have a Registered Agent with a physical address within Oklahoma. The Registered Agent’s primary role is to ensure that your business complies with state regulations and be available to receive any legal notices or official government correspondence.

In Oklahoma, the cost of having a Registered Agent ranges from $50 – $150. However, suppose you are still wondering how to hire a Registered Agent. You can also serve as your Registered Agent, appoint a friend or family member, or hire a professional Oklahoma Registered Agent Services.

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File for Articles of Organization or Certificate of Incorporation

If you form an LLC for your Oklahoma mortgage company, you must file the Oklahoma Articles of Organization, which costs $100. However, you must file the Certificate of Incorporation if you form a Corporation for your Oklahoma mortgage company. 

Including accurate and comprehensive information on this page is essential since mistakes or inconsistencies may delay or dismiss your filing.

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Obtain an Employer Identification Number

You must first obtain an Employer identification number (EIN) in Oklahoma if you will open a bank account or hire an employee for your Oklahoma mortgage company. 

The application of an EIN in Oklahoma can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone (International Applicants) – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

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Step 5: Obtaining Licenses and Registrations

You must obtain a license from the Oklahoma State Banking Department to operate a mortgage company in Oklahoma. The licensing requirements vary depending on the mortgage activity you plan to engage in (e.g., mortgage broker, mortgage lender, or mortgage loan originator).

Here are the general steps to obtain a mortgage license in Oklahoma:

nmls

  1. Complete a license application through the Nationwide Mortgage Licensing System (NMLS). The NMLS is a web-based system that allows mortgage companies and MLOs to apply for, update, and renew their licenses online.
  2. Complete pre-licensing education and pass the NMLS national and state-specific mortgage exams.
  3. Submit fingerprints for a criminal background check and authorize a credit report through the NMLS.
  4. Obtain a surety bond in an amount specified by the Oklahoma State Banking Department. The bond amount will depend on the type of mortgage license you are applying for and the volume of your mortgage loan activity.
  5. Provide proof of financial responsibility, such as a minimum net worth or a fidelity bond, as required by the Oklahoma State Banking Department.
  6. Pay the applicable licensing and application fee of $1,000.

In addition to the mortgage license, you may also need to obtain other licenses, permits, or registrations, depending on your business activities and local requirements. The business license fee in Oklahoma ranges from $50 – $300.

Step 6: Setting Up Your Office and Infrastructure

A professional and well-equipped office is essential for the smooth operation of your Oklahoma mortgage company. Choose a suitable location for your office, considering accessibility, visibility, and proximity to your target market. Ensure your office complies with the Americans with Disabilities Act (ADA) and other local building codes and regulations.

Step 7: Hiring and Training Staff

Your Oklahoma mortgage company’s success will largely depend on your team’s quality and expertise. Hire qualified and experienced professionals, such as mortgage loan originators, processors, underwriters, and administrative staff. However, ensure that your team members meet the necessary licensing and education requirements before hiring an employee for your Oklahoma mortgage company.

Step 8: Marketing and Growing The Company

A well-thought-out marketing strategy is crucial for attracting clients and growing your mortgage company. Some effective marketing tactics for your mortgage company include:

  • Build a professional website showcasing your services, expertise, and testimonials from satisfied clients.
  • Leverage social media platforms to create brand awareness and engage your target audience.
  • Networking with real estate agents, builders, and other industry professionals to build referral partnerships.
  • Participating in local community events and sponsoring charitable causes to create a positive brand image.
  • Offering educational content, such as blog articles, webinars, and seminars, to provide value to your clients and establish yourself as an expert in the mortgage industry.

FAQs

What are the steps to forming a mortgage company in Oklahoma?
The steps include obtaining a state license, registering with NMLS, forming a legal entity, choosing an office location, and hiring staff.
What is the licensing process like in Oklahoma for a mortgage company?
The licensing process involves completing education requirements, passing an exam, submitting an application, and undergoing a background check.
How long does it take to get licensed as a mortgage company in Oklahoma?
It can take several months to complete the licensing process and receive approval from the Oklahoma Department of Consumer Credit.
What are the startup costs associated with forming a mortgage company in Oklahoma?
Startup costs can include licensing fees, office rent, equipment purchases, staff salaries, and marketing expenses.
Are there any particular state regulations that mortgage companies in Oklahoma need to adhere to?
Mortgage companies in Oklahoma must follow the Oklahoma Mortgage Brokerage Act, which regulates how fees are charged and requires certain disclosures to borrowers.
What kind of insurance do I need as a mortgage company in Oklahoma?
Mortgage companies may be required to have errors and omissions insurance to protect against legal claims made by borrowers.
Can I operate a mortgage company from home in Oklahoma?
It may be possible to operate a mortgage company from home in Oklahoma, but zoning regulations and other factors may come into play.
How do I find potential borrowers for my mortgage company in Oklahoma?
Advertising techniques may include online marketing, networking with real estate agents, and attending local events.
What kind of loans can my mortgage company offer in Oklahoma?
Mortgage companies in Oklahoma may offer a range of loan types, including conventional, FHA, VA, and USDA loans.
What is the typical interest rate range for mortgage loans in Oklahoma?
Interest rates on mortgage loans in Oklahoma can vary widely depending on factors such as the borrower’s credit score and the type of loan being offered.
How much can a mortgage company charge in fees in Oklahoma?
Mortgage companies in Oklahoma are limited by law on the amount and types of fees they can charge to borrowers.
What is the role of a mortgage loan officer in Oklahoma?
Mortgage loan officers in Oklahoma work with borrowers to determine their financing needs, explain loan options, and process mortgage applications.
Are there any legal requirements for the loan documents used by mortgage companies in Oklahoma?
Mortgage companies in Oklahoma must provide certain disclosures and follow specific formatting requirements in loan documents.
How can a mortgage company ensure compliance with state and federal laws in Oklahoma?
Compliance can be ensured through regular education and training of staff, use of compliance management software, and periodic audits.
Can a mortgage company outsource loan processing tasks in Oklahoma?
It may be possible to outsource certain tasks such as credit checks and documentation, but regulatory requirements must be followed.
How can a mortgage company build a positive reputation in Oklahoma?
Providing excellent service to borrowers, establishing relationships with real estate professionals, and actively engaging with the community can build a positive reputation.
What is the role of underwriting in the mortgage lending process in Oklahoma?
Underwriting involves evaluating the borrower’s creditworthiness, income, assets and collateral to determine whether a loan should be approved.
Are there any consumer protection laws that mortgage companies must adhere to in Oklahoma?
Mortgage companies in Oklahoma must comply with the Truth in Lending Act and other federal and state laws that protect borrowers.
What is involved in mortgage loan origination in Oklahoma?
Loan origination includes the process of evaluating borrowers, processing applications, obtaining property appraisals, and funding loans.
How can a mortgage company in Oklahoma stay up to date on changing laws and regulations?
Keeping informed about industry news and changes to laws and regulations, along with obtaining regular training and education can help a mortgage company stay current.
Does a mortgage company need a physical office in Oklahoma?
A physical office is typically necessary in Oklahoma to meet legal and regulatory requirements and to provide a professional image.
What kind of software does a mortgage company need in Oklahoma?
Mortgage companies may use software designed for lead generation, loan processing, compliance management, and other tasks.
How can a mortgage company improve its customer service in Oklahoma?
Improving customer service can be accomplished by hiring trained staff, promptly communicating with clients, providing transparent disclosure practices, and more.
What types of marketing tactics are effective for mortgage companies in Oklahoma?
Online marketing, attending industry events, engaging on social media platforms , or direct mail campaigns can help reach potential borrowers in Oklahoma.
How can a mortgage company avoid legal disputes in Oklahoma?
Engaging experienced legal counsel for guidance, ensuring compliance with regulations, and thoroughly documenting all interactions can help avoid legal disputes.
What happens if a mortgage company violates compliance regulations in Oklahoma?
Violations of compliance regulations can result in line penalties, revocation of licenses, or other legal consequences.
How can a mortgage company best serve the needs of borrowers in Oklahoma?
By being knowledgeable about offers and answering questions immidiately and by providing services such as loan program analysis,payment and payoff options in Oklahoma.
Can mortgage companies in Oklahoma employ loan originators as independent contractors?
It is possible to employ loan originators as independent contractors, but strict compliance guidelines must be followed.
Is it worthwhile for a mortgage company in Oklahoma to join industry associations such as the National Association of Mortgage Brokers?
Joining industry associations can provide a number of benefits, including access to peer support and educational resources, public relations exposure, and advocacy representation.
How do I apply for a mortgage company license in Oklahoma?
License applications can be submitted online through NMLS, the Nationwide Multistate Licensing System.
What are the eligibility requirements for obtaining a mortgage company license in Oklahoma?
Eligibility requirements can be found on the Oklahoma Mortgage Licensing Act page on the NMLS website.
Is obtaining a surety bond required in Oklahoma to form a mortgage company?
Yes, a surety bond is required for obtaining a mortgage company license in Oklahoma.
How much does it cost to obtain a mortgage company license in Oklahoma?
The licensing fee is $1,250 for new companies and $750 for renewals in Oklahoma.
Can a mortgage company branch office be installed in Oklahoma?
Yes, a mortgage company can have a registered mortgage office (RMO) in Oklahoma.
What are the commitments of an Oklahoma mortgage company?
Oklahoma mortgage companies must adhere to state and federal mortgage law and provide honest advice to customers.
Can a local person or company act as a broker in Oklahoma without a license?
No, operating as a broker without a license is illegal in Oklahoma.
Why is mortgage servicer registration mandatory for Oklahoma mortgage companies?
Annual registration with the Oklahoma State Banking Commission is required for companies to maintain compliance with state law.
How long is the process for obtaining an Oklahoma mortgage company license?
The time-frame for acquiring and issuance an Oklahoma mortgage company license relies on company’s qualifications and purposes.
Who should mortgage companies in Oklahoma contact for approval to make use of an assumed name?
The Oklahoma State Banking Department must be contacted and approve any assumed name to establish a legit business activity in Oklahoma.
Is a minimum tangible net worth required for mortgage companies in Oklahoma?
Yes, a minimum net worth of $25,000 is required for mortgage companies to process timely applications for operating license agreement in Oklahoma.
Are there any investor requirements required for mortgage brokers in Oklahoma?
Mortgage brokers in Oklahoma need a $25,000 business bond, effective business practices, and guarantees to offers deposit rights to customers to qualify.
Can my Oklahoma mortgage company operate online?
Yes, internet business transactions by licensed mortgage companies can be done through the Nationwide Multistate Licensing System or any approved site determined by the state.
Are there any insurance requirements for mortgage brokers in Oklahoma?
No, there are no precise insurance requirements for mortgage brokers operating in Oklahoma because compensation claims deposited must be safe from illegal activity.
Are there legal requirement for expansion in mortgage company branch certification in Oklahoma?
Yes, substantial details, documents, fees among other quintessential material for expansion must be approved by the Oklahoma State banking commission during application and annually renewal thereof.
What duties and responsibilities does an Oklahoma mortgage broker have towards their borrowers?
Oklahoma mortgage brokers are responsible for discussing borrowers’ eligibility, terms of dealings, and must provide unbiased, and accurate advice based on factual liabilities associated with each financial products and service.
Can Oklahoma mortgage licenses be renewed?
Yes, Oklahoma mortgage licenses must be renewed using the NMLS every year by paying required fees – the renewal should be completed on a periodic basis.
How can Oklahoma mortgage companies win back a license if it has been disapproved?
In Oklahoma, license holders who have lost license or rejected for license in certain standing due to violation must submit an in-depth petition to the Governor.
Are Continuing Education (CE) courses mandatory for Indiana mortgage brokers and lenders?
Yes, Continuing Education (CE) credits as advised by the NMLS are mandatory for renewal of operating licenses for Oklahoma mortgage brokers.
Can a mortgage company employ active licensed disbared/regulation breaching brokers for company operating in Oklahoma?
No, Oklahoma mortgage companies or brokers may never be hired/considered suspended or banned broker of any state.
What fees does a mortgage expert need to pay to work or offer any loan activity in Oklahoma?
A criminal subsistence fee of $25 detailing and authorization the validation of experts required through submissions and renewal with comprehensive Oklahoma State banking commission as per updates and demands of law and policy.
What types of points can Oklahoma lenders charge mortgage borrowers during loans?
Oklahoma lenders can utilize an origination cost alone unless additional that should comply with the stipulation provided by Home Ownership and Equity Protection Act (HOEPA).
Is an Oklahoma broker review on consumer finances report audit regularly?
Yes, an authority accredited monitoring organization should carry out periodic audits on Oklahoma mortgage entities in order to attend to financial practices authenticating or supplying the state with regular lender report to the licensing operations used.
Is there a feedback policy for Oklahoma mortgage brokers?
An authorized or local director investgation area (BIA) for security issued recommends solicit input on apprehensive practices or activities for protecting home loan borrowers for which comments could be provided without revealing information with public auditing checks.
Does Oklahoma offer any tax incentives for mortgage borrowers?
The Oklahoma rural development urges petitioners to utilize the offer provided by worth distribution facilities tax credit.
Is homeowner counseling service available in Oklahoma?
Yes, Oklahoma homeowners can access a great variety of homeownership counseling from the state government funds as enlisted on HUD’s official website.
Do mortgage companies have client ownership after lending services have been completed?
No, mortgage companies must free all protective topics and ensure that all items valuable to doing payments are controlled by clients unless differently given by express verbal discussion or customer written requested.
Can a mortgage broker act on behalf of the borrowers for the purpose of rate locking?
Only entities and persons who can maintain lawful agreements, bond or commercial shield requisites specific licensing rights and also adhere to ideal living standard such as disclosure cannot arguably tend to lock customers on any terms regarding immediate building and allowing the rate charged or agreed on by actual lenders.

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Conclusion

Forming a mortgage company in Oklahoma can be fulfilling and profitable. By understanding the industry, forming a solid business foundation, obtaining the necessary licenses, and implementing effective marketing strategies, you can build a successful mortgage company that helps make the dream of homeownership a reality for countless individuals and families in Oklahoma.

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