An Ohio MLO Originating Michigan Loans From Ann Arbor
Jordan holds an active Ohio MLO license and works for an Ohio-based mortgage lender that is not licensed in Michigan. Jordan's home office is in Ann Arbor, Michigan, where Jordan has a dedicated desk and takes calls. On April 4, a Michigan real estate agent asks Jordan to prequalify a buyer for a $275,000 loan secured by a Detroit duplex. Jordan quotes a rate, collects the buyer's income and Social Security number, and says the buyer is 'pre-approved.' Jordan's company has not filed a Michigan license application; it plans to 'close the loan in Ohio' and assign it to a Michigan servicer. Jordan's NMLS record shows only Ohio and no Michigan sponsorship. The company's compliance officer says Michigan licensing is unnecessary because Jordan never meets Michigan borrowers face to face.
1. Does Jordan need a Michigan MLO license?
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Yes. Michigan requires an MLO license for taking a residential mortgage application, offering or negotiating terms, or being compensated for those activities when the loan is secured by Michigan property. Jordan quoted a rate, collected income and a Social Security number, and issued a pre-approval for a Detroit duplex. Working from Ann Arbor and never meeting the borrower face to face does not create an exemption. Jordan must be licensed in Michigan through NMLS and sponsored by a Michigan-licensed company before engaging in the activity.
2. Does the Ohio lender need a Michigan license?
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The company likely needs a Michigan mortgage broker, lender, or servicer license unless it qualifies for a specific exemption such as a bank or credit union. Closing the loan in Ohio or assigning it to a Michigan servicer does not avoid Michigan licensing when the security property is in Michigan. The company should stop taking Michigan applications until licensed; otherwise Jordan and the company face DIFS enforcement and possible civil or criminal penalties.
3. What should Jordan and the company do before proceeding with the Detroit loan?
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Jordan should stop the Michigan pipeline, notify the compliance officer in writing, and have the company apply for the appropriate Michigan license and add Jordan as a sponsored MLO. Jordan should not quote rates, take applications, or issue pre-approvals until licensed. The company should review any Michigan loans already taken, remediate as appropriate, and consult counsel about self-reporting to DIFS. The file should document the April 4 contact and the corrective steps.