While most people tend to become sales agents and brokers, other roles exist that are just as integral to the home-buying process.
One such role is that of a mortgage loan officer or MLO for short. This is the person that helps buyers with the mortgage process.
If you’re interested in taking this role, then you’ve come to the right place.
This is because, here, we’re going to give you a complete 2023 guide on how to become a mortgage loan officer (MLO) in Colorado.
We’ll list all the steps, all the requirements, all the details…
This way, you have a roadmap for the whole journey.
So let’s begin!
How to Become an MLO in Colorado – The 7 Steps
Here’s a rundown of the 7 steps to becoming an MLO in Colorado:
- Create an account with NMLS
- Complete the NMLS-approved pre-licensure education (PE)
- Pass the SAFE MLO exam
- Get a Surety Bond and E&O Insurance
- Undergo a state and criminal background check
- Find a company sponsorship
- Complete the MLO application process
Let’s get to the details.
Step #1: Create an Account with NMLS
The first step is as simple as creating an account.
You’ll need an account with NMLS (or Nationwide Mortgage Licensing System) because that is where all your MLO activities will be held.
To create an account, simply:
- Go to the NMLS login page
- Request an account
- Select to create an ‘Individual’ account
- Follow the prompts on the screen
- Receive your ID number. WARNING! It’s important to keep this as you’ll need it later on.
Step #2: Complete the NMLS-Approved Pre-Licensure Education (PE)
In Colorado, you’re required to complete at least 20 hours of pre-licensure education (PE).
This should include:
- 3 hours of Ethics
- 3 hours of Federal Law
- 2 hours of Non-Traditional Mortgage Lending
- 2 hours of Colorado-specific defined electives
- 10 hours of general electives
The 2-hour Colorado-specific electives can be studied as a standalone course.
Also, the course provider MUST be NMLS-approved.
You can find a complete list of approved providers here.
Our top 4 recommendations are:
Step #3: Pass the SAFE MLO Exam
After your education, you can take the SAFE MLO exam administered by Prometric.
But before that, you need to register and schedule.
Here are the steps:
- Log into your NMLS account
- Fill up a test enrollment window for your SAFE MLO exam
- Pay the $110 exam fee
- Accept the Candidate Test Security and Confidential Agreement
- Go to the Prometric scheduling page
- Schedule an online or in-person SAFE MLO exam appointment
- Read through Prometric’s information review
Now, the exam consists of 120 items (but only 115 will be scored) that you’ll have to answer within 190 minutes.
The questions are divided across all the course areas as follows:
- Federal Mortgage-Related Laws – 24%
- Uniform State Content – 11%
- General Mortgage Knowledge – 20%
- Mortgage Loan Origination Activities – 27%
- Ethics – 18%
As mandated by the SAFE Act, the minimum passing score for the SAFE MLO exam is 75%.
Step #4: Get a Surety Bond and E&O Insurance
In Colorado, aspiring MLOs are required to get a surety bond and E&O insurance. This is to protect them against certain types of liability.
For surety bonds, the minimum individual coverage should be $25,000.
As for E&O insurance, here are the minimum coverages for individuals:
- Minimum coverage – $100,000
- Minimum annual aggregate limit – $300,000
- Deductible no greater than – $1,000 OR $20 (for reverse mortgage policies)
You can check out CRES – an insurance company that offers these coverages for real estate.
Step #5: Undergo a State and Criminal Background Check
In Colorado, you need both a state and criminal background check.
The state background check should be submitted to the CO Bureau of Investigations, while the criminal background check should be submitted to NMLS.
For your state background check, click here for the full process. It will cost you $39.50.
As for your criminal background check, you first need to authorize it through your NMLS account.
Here are the steps:
- Log into your NMLS account
- Go to the “Filing” section
- Click on “Criminal Background Check”
- Complete the fields
- Attest authorization
After that, you can schedule a fingerprinting appointment through Fieldprint. They will be the ones to submit your fingerprints to the NMLS.
Step #6: Find A Company Sponsorship
It’s time to find a company to work for — this will be your sponsorship.
Always try to look for a company that is reliable, takes care of its employees, and fits your needs and preferences.
Once you find that company, have them submit a sponsorship request to the Colorado Real Estate Division.
If approved, your MLO status will be “active”.
If not yet approved, the status will stand by at “pending”.
If you cannot yet find a good company sponsorship, don’t worry – your status will be “approved-inactive” until you can find one.
Step #7: Complete the MLO Application Process
Here are the steps to completing your MLO application process:
- Submit Individual Form (MU4) in NMLS.
- Authorize a credit report check through NMLS.
- Answer disclosure questions in the form – and submit any documents that are necessary.
- Pay the necessary fees to NMLS:
- NMLS initial processing fee – $30
- Credit report fee – $15
- Criminal background check fee – $36.25
- Apply for a state license through the CO-DORA Online Service website. WARNING! This should be done 24 hours after submitting Form MU4.
- Pay the Colorado license fee of $25.
- Receive your CO-DORA MLO license.
You are now an official mortgage loan officer in Colorado!
Frequently Asked Questions About MLOs in Colorado
There are probably still some questions in your mind.
Well, let’s answer the 2 most asked ones…
How Much Do MLOs Make in Colorado?
As of October 2022, the average annual income for MLOs in Colorado was $80,000. Of course, that’s just the average.
Some MLOs enjoy as much as $150,000 per year, while others earn a low of around $55,000 per year.
What Do MLOs Do?
Mortgage loan officers have the important task of handling mortgage applications for their clients — and advising their clients on the best deal they can make.
This may also involve negotiating on their behalf, as well as handling paperwork to get the mortgage processed.
Considering how most homes are bought on a mortgage, MLOs are in hot demand and often see as much work as their better-known broker counterparts.
So there it is — the 7 steps on how to become a mortgage loan officer (MLO) in Colorado.
Yes, the State of Colorado has a few more requirements compared to other states.
But with this guide, you know EXACTLY what you need — and how to get it.
If you follow the steps one by one, you’ll soon be on your way to an MLO license.
What are you waiting for?
Now is the best time to get started!