Michigan-Specific Laws and Regulations
The Michigan framework
- DIFS (Department of Insurance and Financial Services) licenses mortgage brokers, lenders, and servicers under the Mortgage Brokers, Lenders, and Servicers Licensing Act (Act 173 of 1987) and registers MLOs under the Mortgage Loan Originator Licensing Act (Act 75 of 2009).
- MLOs must be sponsored by a licensed broker or lender, complete SAFE Act pre-licensing and testing, and renew through NMLS with continuing education.
- Banks, credit unions, and certain exempt entities may not need a state company license, but their MLOs still must be registered.
- Licensees must maintain books and records, file reports, and satisfy surety-bond and net-worth requirements where applicable.
Foreclosure in Michigan
Michigan uses non-judicial foreclosure by advertisement for most residential mortgages. Notice is published once each week for four consecutive weeks, followed by a public sale after the required notice period. The borrower generally has a six-month redemption period after the sale; the period can be shorter for abandoned property and longer in limited circumstances. Judicial foreclosure remains available.
Worked example
A Michigan-licensed MLO takes an application for a Michigan condominium, but the sponsoring broker's license has lapsed. The MLO cannot originate until the broker is licensed again because the individual license does not authorize origination without a licensed sponsor.
Traps that cost marks
An MLO license is not a company license. Property location, not the borrower's residence, determines which state's licensing rules apply. A short sale or deed-in-lieu does not automatically eliminate redemption rights. Exempt status for a bank does not exempt its individual MLOs from registration.