How to Become a Mortgage Loan Officer (MLO) in Texas

Among the states, Texas probably has the most confusing mortgage loan officer process. 

And this is because there are two agencies that issue MLO licenses — the Department of Savings and Mortgage Lending (SML) and the Office of Consumer Credit Commissioner (OCCC). 

You’ll have to determine which agency to go with. 

Moreover, both agencies have slightly different requirements. 

So if you plan on becoming a mortgage loan officer in the state, you might feel a bit overwhelmed. 

Don’t!

We’re here to help. 

Today, we’re going to walk you through ALL the steps on how to become a mortgage loan officer (MLO) in Texas. 

Yes, whether you want to register with the SML or OCCC, we have the answers for you. 

So let’s dive right in!

NOTE: Mortgage loan officers and mortgage loan originators are the same thing. Originator is the formal term, while officer is informal. Don’t get confused with this. 

How to Become a Mortgage Loan Officer in Texas – The 6 Steps to Licensure

To become an MLO in Texas, an applicant must go through all these steps:

1. Determine which agency to register with
2. Create an NMLS account
3. Complete the required pre-licensure education
4. Pass the MLO licensing exam
5. Submit an MLO application
6. Verify your employment 

Let’s go through the details…

Step #1: Determine Which Agency to Register With

As we already mentioned, you have to pick either the Department of Savings and Mortgage Lending or the Office of Consumer Credit Commissioner. 

But it isn’t down to preference. 

No.

The agency you register with will depend on what type of mortgage loans you’ll be working with. 

For the most part, MLOs in Texas register with the SML as this is for residential loans. 

However, you need to register with the OCCC if you deal with residential property tax loans or manufacturing house loans. 

Also, the OCCC is required if your company is registered with OCCC. 

For more information about this, please check out this page. 

You can also read more about the OCCC here and the SML here. 

Now, whatever agency you register with, the following steps are still applicable (with a few differences, as we’ll see)… 

Step #2: Create an NMLS Account

All MLO licensing in Texas is done through the Nationwide Mortgage Licensing System (NMLS). 

This is why you must create (or request) an account with them. 

Don’t worry — it’s as simple as creating any social media account. 

Just make sure to apply as an ‘Individual’ account and give the correct information. 

Once that’s done, you will receive a unique identifier number. 

This will be your ID number throughout your application and MLO career — so memorize it. 

If not, you can view your ID number in the ‘Composite View’ tab in your NMLS account. 

Step #3: Complete the Required Pre-Licensure Education

Okay, here is a slight difference between the SML and OCCC agencies. 

If registering with the SML, you need to complete 23 hours of MLO pre-licensure education. 

This should include:

• 2 hours of Non-Traditional Mortgage Lending
• 3 hours of Federal Law
• 3 hours of Ethics
• 3 hours of Texas-specific content
• 12 hours of general electives

For licensure with the OCCC, you only need to complete 20 hours, including:

• 2 hours of Non-Traditional Mortgage Lending
• 3 hours of Federal Law
• 3 hours of Ethics
• 12 hours of general electives

Either way, here are some NMLS-approved pre-licensure education providers that you can check out:

• The CE Shop (SML)
• The CE Shop (OCCC)
• AYPO Real Estate (Both)
• Knowledge Coop (Both)
• Cape School (SML)
• OnlineEd (SML)

You can check here for other approved providers. 

Step #4: Pass the MLO Licensing Exam

Exam time!

For both the SML and OCCC, you can take the National Test Component with Uniform State Content.

This is administered by Prometric and registered through the NMLS. 

To register for the exam, you must:

• Go to your NMLS account
• Select the ‘Test & Education’ tab
• Create a ‘New Test Enrollment Window’
• Add the Texas National Test Component with Uniform State Content to your cart
• Accept all the Agreements
• Pay the test window fee of $110 with a bank account or credit card

After that, you can schedule an online or in-person exam with Prometric. 

To pass, you need a score of at least 75%. 

Now, you’ll have to answer 120 questions, but only 115 are scored while the other 5 are part of a pilot survey. 

Although take note, you won’t know which questions are pilot and which are scored — so best to take them all seriously.  

You’ll be given a little over 3 hours to answer everything. 

To know more about the MLO licensing exam, you can check out the MLO Testing Handbook here. 

Step #5: Submit an MLO Application

Whether you’re applying with the SML or OCCC, the application is done through your NMLS account. 

You’ll have to complete, attest, and submit Individual Form MU4. 

To get it, simply login to your NMLS account, head over to the ‘Filing’ tab, and select ‘Request / New Update’.

There, you’ll need to provide all the information asked for. This will include:

• Application information.

• Personal information, including other names, residential and employment history, current businesses, etc…

• Answer disclosure questions — and explain and, if necessary, provide supporting documents to any ‘yes’ answer. 

• Authorize a Criminal Background Check and fill up the demographics — you must get fingerprinted by the NMLS Fieldprint if you don’t have any prints on file. 

• Authorize a Credit Report and complete the Identity Verification Process (IDV).

• If applicable, upload several documents in the Document Uploads section (for SML application only). This includes credit report explanations (for any derogatory accounts), legal name/status documents (for marriages, divorces, passports, etc…), evidence of authorization to work in the US (for those born outside of the US), proof of military service (for militaries on duty, a spouse of a military on duty, or a veteran). 

• Attest and submit Individual Form MU4.

• Pay the appropriate fees. Check the table below for SML and OCCC payments. 

Step #6: Verify Your Employment

It’s time for the last step!

If you’re already employed, all you need to do is ask your employer to request sponsorship. 

If not, then you have to go out and look for a company to work with. 

Once you find a job, you can get a sponsorship request. 

For the SML, you must let your employer request sponsorship through the NMLS. 

Without it, your MLO application will have an ‘Approved-Inactive’ status, which means you can’t yet practice as a mortgage loan officer. 

Once the sponsorship is accepted, though, your status will change to ‘Approved-Active’ and you can start practicing. 

Just note that the SML does not issue paper licenses. 

Also, you’ll need to update your employment history with your new company. 

You can get the SML MLO application checklist here. 

As for the OCCC, your employer needs to submit an Employment Verification Form to the OCCC itself.

They can either email it to licensing@occc.texas.gov…

Fax it at (512) 936-7610…

Or mail it to 2601 N. Lamar Blvd. Austin, TX 78705. 

When accepted, your NMLS MLO status will change from ‘Approved-Inactive’ to ‘Approved-Active’. 

The OCCC also does not issue paper licenses. 

You can get the OCCC MLO application checklist here. 

Conclusion

That is how to become a mortgage loan officer (MLO) in Texas. 

So whether you need to get licensed by the SML or OCCC, you now know all the steps and requirements for both. 

And now that you know all that, you can get started right away. 

Best of luck!