[Gustan Cho]

As of May 26, 2026, my rough estimate is:

North Dakota + South Dakota company licensing only: about $3,000 to $6,500 if you handle most of it yourself.
With a licensing consultant: more realistically $7,000 to $14,000+ all-in for both states, depending on how much setup work they do.

This does not include payroll, LOS, compliance audits, E&O, warehouse line, accounting, registered agent, corporate formation, or ongoing compliance.

1. North Dakota Estimated Licensing Cost

For residential mortgage brokering/lending, North Dakota now uses the Residential Mortgage Lender License under NDCC Chapter 13-12. North Dakota confirms this replaced the prior Money Broker framework for residential mortgage lenders effective August 1, 2023.

Estimated North Dakota startup licensing cost:

North Dakota law states the application must include a $400 investigation fee, a $400 annual license fee, and $50 per branch location. It also requires a surety bond of not less than $50,000 and minimum net worth of $25,000.

2. South Dakota Estimated Licensing Cost

For a pure brokerage model, South Dakota uses the Mortgage Brokerage License, which applies to a company placing loans with investors for a fee and not servicing the loans.

Estimated South Dakota startup licensing cost:

South Dakota’s mortgage brokerage license fee is $500, and its MLO registration fee is $150. (Legal Information Institute) South Dakota’s bond schedule is volume-based: $25,000 bond under $25 million, $35,000 bond from $25,000,001 to $100 million, and $50,000 bond over $100 million in South Dakota mortgage volume.

3. NMLS Processing Fees

Current NMLS state licensing processing fees are:

NMLS lists these current fees directly in its processing fee schedule.

4. Consultant Cost Estimate

For a two-state mortgage company setup in North Dakota and South Dakota, I would budget:

Low-end consultant: $3,000 to $5,000
Experienced NMLS mortgage licensing consultant: $5,000 to $9,000
Full-service setup with policies, financial statement guidance, NMLS filings, deficiency responses, bond coordination, and regulator follow-up: $8,000 to $12,000+

That is consultant labor only. State fees, NMLS fees, bonds, registered agent, corporate filings, and background/credit fees are usually separate.

5. Brick-and-Mortar Requirement

North Dakota: No in-state brick-and-mortar office appears required. North Dakota’s DFI FAQ says North Dakota does not require a physical presence for the residential mortgage lender license.

South Dakota: I did not find a clear current state rule requiring an in-state brick-and-mortar office for an out-of-state mortgage brokerage. South Dakota requires a proposed business location and NMLS licensing, but the public state page does not say a physical South Dakota office is mandatory. (South Dakota Labor Department) I would still confirm this directly with the SD Division of Banking or your licensing consultant before filing.

6. Eligibility Requirements

For you individually as the MLO, you generally need:

You must have an NMLS individual account, completed SAFE education, passed the SAFE MLO test, authorized a credit report, completed fingerprints/background check, satisfy financial responsibility and character standards, complete annual CE, and be sponsored by the licensed company. CFPB SAFE Act rules require at least 20 hours of NMLS-approved pre-licensing education, including federal law, ethics, and nontraditional mortgage training.

For the company, expect:

Business entity registration/foreign qualification if needed, registered agent, NMLS company MU1, control person MU2s, ownership/management disclosures, financial statements, surety bond, company policies, AML/BSA policy, information security/cybersecurity policy, business plan, disclosure questions, and regulatory review of character, experience, financial condition, and fitness.

For North Dakota specifically, the company must maintain $25,000 minimum net worth and a $50,000 surety bond. North Dakota also prohibits a branch registration that constitutes a prohibited “net branch” or “net branching arrangement,” so the ownership/control structure must be clean.

7. Timeline Estimate

North Dakota: If your filing is clean, I would estimate 2 to 6 weeks. North Dakota says its average new MLO processing time is 1 to 14 days, depending on completeness and response time, but company licensing usually takes longer than individual MLO approval.

South Dakota: I would estimate 3 to 8 weeks for a clean company filing, possibly longer if they request additional documents, fingerprints, financials, policies, or explanations.

For both states together, a realistic planning timeline is 45 to 90 days from preparation to final approval, assuming the company entity, financials, bond, policies, and NMLS filings are ready.

8. Does Your Current Experience Help?

Yes, it helps a lot.

Because you have been a licensed MLO and branch manager in North Dakota and South Dakota for the past four years, you likely avoid the biggest delays tied to starting from scratch, such as SAFE testing, PE education, new MLO licensing, and proving basic mortgage experience. Your existing licensing history should also help with regulator comfort, assuming your record is clean.

However, it does not eliminate the company licensing review. The new company still needs its own NMLS company record, bond, financials, control person disclosures, policies, state approvals, and sponsorship setup.

Bottom Line Estimate

For North Dakota + South Dakota only, I would budget:

Do-it-yourself filing: about $3,000 to $6,500
With consultant: about $7,000 to $14,000+
More conservative cushion: $15,000 available before launching

Your existing MLO and branch manager history gives you a meaningful advantage. The main work is not your individual license. The main work is getting the new company NMLS approved, bonded, financially documented, compliant, and properly structured without triggering net-branch or control-person issues.

[Gustan Cho]

When it comes to NMLS company, branch, or individual mortgage licensing, it can get really confusing and it is very difficult to understand many questions. There are many NMLS mortgage licensing consultants and a lot of them do not return you inquiry right away. However, on NMLS mortgage licensing I highly recommend is Steven, the owner and President of Integrity Mortgage Licensing. When I was sponsored by my previous employer, Loan Cabin, Inc., Integrity Mortgage Licensing was the company’s NMLS mortgage licensing consultant. I had nothing but phenomenal experience with Steve and his staff at Integrity Mortgage Licensing. Plus, I highly recommend Integrity Mortgage Licensing’s website. The website is very informative, user-friendly, and easy to navigate. Most questions you have should be on their website. However, if you need to get a hold of someone, you can call them and if they do not answer, they will return your call promptly. Attached is the link to Integrity Mortgage Licensing.

Integrity Mortgage Licensing – State Mortgage License Service

integritymortgagelicensing.com

Integrity Mortgage Licensing - State Mortgage License Service

Mortgage Company Licensing Services We Assist Mortgage Companies We are a State Mortgage Licensing Service We assist mortgage companies with obtaining Mortgage Broker Licensing, Mortgage Lender Licensing and Banker Licensing,

[Gustan Cho]

AI is moving faster than anyone has expected. I am seeing a great benefit with AI in the mortgage industry.

The Impact of Artificial Intelligence Technology on Workforce Dynamics in the Mortgage Sector

Artificial intelligence is now a regular feature in the mortgage and housing industry. Tools such as ChatGPT, Claude, Microsoft Copilot, Gemini, Grok, and Borrower AI are widely used at work. On GCA forums, some people are concerned that AI-driven underwriting could replace human jobs. The main questions are whether these tools will make work more productive or if mortgage workers will need to look for new roles.

The Benefits of AI in the Mortgage Industry

AI offers many benefits to the mortgage industry for those ready to adapt. Mortgage loan originators can use AI to reply to applicants more quickly, follow up more effectively, create targeted ads, share educational materials, and explain loans more clearly. However, relying only on AI means missing out on the deep knowledge that experienced loan officers have, especially with FHA, VA, USDA, conventional, and non-QM loans. People who develop advanced skills beyond basic tasks will do well, while others may find their careers slow down.

AI in Mortgage Processing

Processing, which involves many checklists, is well-suited for automation. AI can spot missing bank statement pages, review pay stubs, compare documents, organize conditions and deposits, and reduce manual data entry. Still, processors will not disappear. They will need to improve their file organization and learn more about underwriting and loan rules.

The complex will handle routine work, but complex requirements from contract to closing will require specialized processors to summarize information and expedite decision-making.

AI in Compliance and Underwriting

The core of underwriting is still human judgment. AI can identify issues, but only a skilled underwriter can assess compliance, income stability, compensating factors, and risk. Automation will make manual reviews easier, but complex cases will still need experienced professionals. During closing, AI can review documents, detect missing signatures, and support compliance by verifying dates and comparing fees. People who focus only on routine checks may be replaced, but experts in closing documents, buyer and title issues, funding, and compliance will still be essential.

How Real Estate Agents Can Benefit Using AI

AI supports real estate agents by helping write listing descriptions, create social media buzz, understand market data, build buyer campaigns, and make client follow-up easier. However, it cannot build relationships, negotiate deals, or offer the detailed insights and creative problem-solving needed during showings and appraisals.

Agents who use AI for marketing and education will do well, but those who rely only on basic tasks may struggle. There are risks, including data privacy, fair lending, borrower communication, and too much reliance on automation.

Companies need to protect borrower information and use AI tools with care. The future will favor professionals who combine AI’s advantages with strong ethics and people skills. While AI can streamline paperwork, marketing, and organization, it cannot replace the knowledge needed for complex loans, helping borrowers, handling underwriting challenges, building referrals, and guiding clients. All GCA Forum members can benefit from these ideas. AI should be used carefully, not feared or ignored. Professionals should try out and thoughtfully review AI tools. Human judgment should always be at the center. Those who embrace technology will move ahead, while others may fall behind.

AI in the Mortgage Industry: Will AI Help or Hurt MLOs

gustancho.com

AI in the Mortgage Industry: Will AI Help or Hurt MLOs

Learn how AI in the mortgage industry creates new challenges for MLOs, processors, underwriters, realtors, and mortgage companies.

[Gustan Cho]

It was great talking with you this afternoon. I’m glad to hear you and your family are doing well. If you don’t mind, let’s discuss potential possibilities and/or options as a case scenario. Exploring a HELOC or second mortgage may be an option which I know it may be short based on a guestimate of $400,000 with a $340,000 first position. A HELOC or second mortgage likely won’t be enough to fund the entire project. Let’s say that your main home is worth $400,000 and has a $340,000 mortgage, so you have $60,000 in equity, which is 15% of the home’s value.

I suggest checking exactly how much you can borrow with a HELOC or second mortgage.

Most lenders let you borrow up to 80% or 85% of your home’s value with a HELOC, so you can only use some of your equity. A few lenders go up to 90% or 95%, but that’s usually for people with great credit, high income, and low debt. For these high-limit HELOCs, you generally need a credit score of at least 700. For example, $400,000 × 90% = a maximum total debt of $360,000.

$360,000 minus your current $340,000 mortgage means you could get about $20,000 from a HELOC or second mortgage.

If you qualify for 95% combined loan-to-value (CLTV),

$400,000 times 95% gives a maximum total debt of $380,000.

$380,000 minus your current $340,000 mortgage leaves $40,000 in available borrowing power. Even with a high 90% or 95% HELOC, you’ll likely get $20,000 to $40,000 before fees. With a 660-credit score, it’s tough to get approved for a 95% loan unless you have a strong relationship with a special lender or credit union. Some, like Navy Federal, offer high-limit HELOCs, but their requirements are strict.

Financing Options

Option 1: HELOC or Second Mortgage for Down Payment Only

This option may be suitable if funds are only needed for:

• Permits
• Plans
• Engineering
• Utility connection
• Down payment toward hard money
• Cash reserves
• For the first builder, a HELOC alone probably won’t be enough for the entire construction project, since there isn’t enough equity.

A ground-up hard money construction loan is often the best way to finance new investment property builds. Hard money lenders look at your project’s size, land value, after-repair value, exit plan, and available cash, not just your credit score. These loans are short-term, backed by the property, and usually last 12 to 24 months. They are often interest-only.

Interest rates are usually between 10% and 13% or higher, depending on risk, your experience, and the market. Most lenders offer 70% to 75% of the after-repair value or 75% to 90% of the total project cost.

Here’s how construction draws work:

• Money is given before scheduled inspections.
• Most lenders require a minimum loan of $100,000 to $150,000, but some private lenders may accept smaller amounts.

For example, current investor loans might have rates of 9% to 13%, lender fees of 1% to 5%, and offer 75% of the after-repair value and loan-to-cost ratios of 85% to 90%. The exact rehab or construction funding depends on the lender and loan terms.

Possible Structure of the Hard Money Loan

If the adjacent lot is a legal parcel, the simplest way to structure the loan would be:

1. Secure financing for just the new construction.
2. Use the land value and cash as equity.
3. Secure a construction loan up to the new construction value.
4. After construction is finished and you have a certificate of occupancy and a lease, you can refinance with a DSCR rental loan.
5. A hard money lender might offer up to 75% of the after-repair value, capped at $120,000.
6. You’ll likely need to put in some of your own money before the lender releases construction funds.

You may also need upfront cash for down payments.

• Plans
• Permit Fees
• Closing Costs
• Interest Reserve
• Contingency Reserve
• Builder Deposit
• Insurance
• Reserve for Appraisal and Inspection Fees

Another important thing to consider:

This is a good sign. The project is moving forward and could lead to more development in the future. Since the unit is on a separate parcel, it can be treated as its own investment property.

If it’s on the same parcel as your main home, a different lender would consider it an ADU, following their guidelines.

That affects:

• Permits
• Zoning
• Collaterals
• Financing
• Yield
• Refinancing

With an 85% loan-to-value on your main home, a HELOC would likely give you only $20,000 to $40,000. And with a 660-credit score, approval isn’t certain. Instead, you could use a small HELOC or second mortgage to build your cash reserves, then get a hard-money construction loan. After the project is finished, refinancing with a DSCR rental loan is a good option.

Lenders will want these details:

• Complete property address with state
• Is the site for the new house on a different parcel?
• Estimated costs for the build
• Estimated end value of the build
• Builder contract
• Amount of cash remaining for the close
• Current status of permits and zoning
• Exit strategy: Anytime between rent, sell, or refinance
• Anticipated rental income after the project is complete.

For borrowers in a similar situation, the best approach is often to use a HELOC for down payments or reserves if possible, and rely on a hard money or local construction lender for the main project financing.

[Gustan Cho]

Skylar is turning out to be a great dog and a lot of her character reminds me of Jeanie, my female German Shepherd dog i raised while I was in high school. Skylar, two years old is always by me. When I get dressed to run an errand she runs to the service door and is ready to go. She is jumping up and down by the door. She always. She always lays next to my side of the bed. When she goes out potty with all the other dogs, she goes potty and runs straight to my room and lays next to me. She’s getting to me my best buddy.

[Gustan Cho]

Rocket Mortgage Initiates $100 Million Lawsuit Against UWM

Rocket Mortgage has filed a suit with the New York Supreme Court’s Commercial Division against United Wholesale Mortgage (UWM). The suit alleges that UWM deliberately and unlawfully breached non-solicitation agreements for a package of mortgage servicing rights that UWM sold to Mr. Cooper in 2024, and seeks damages of up to $100 million.

Rocket became involved in the dispute when Rocket Companies completed the acquisition of Mr. Cooper on October 1, 2025, creating a combined servicing platform with approximately 10 million homeowner accounts.

UWM, according to the suit, sold roughly 182,000 loans with about $65 billion in unpaid principal balances to Mr. Cooper and later breached the agreements by using refinance incentives, broker outreach, and technology to target borrowers from the servicing rights.

Rocket Mortgage Sues UWM For $100 Million In Mortgage Servicing Rights

Rocket filed a lawsuit against UWM for nearly $100 million, claiming they breached non-solicitation agreements regarding Mr. Cooper’s mortgage servicing rights.

Rocket Mortgage Sues UWM For $100 Million In Mortgage Servicing Rights.

Two leading U.S. mortgage industry corporations are now engaged in litigation. Rocket Mortgage has filed a lawsuit against United Wholesale Mortgage, alleging that UWM violated non-solicitation terms in a contract for mortgage servicing rights sold to Mr. Cooper. Rocket Mortgage seeks to recover nearly $100 million in damages. This case is anticipated to be among the most high-profile lawsuits in the mortgage servicing industry in 2026.

Rocket Mortgage and UWM are among the largest mortgage companies in the United States. Rocket Mortgage operates exclusively online through a consumer-direct model, while UWM utilizes broker channels as a wholesale mortgage lender. The longstanding rivalry between these companies is further exemplified by this lawsuit.

This lawsuit holds significant implications for the mortgage industry. Unlike many corporate disputes with limited public impact, this case highlights the importance of servicing rights in mortgage lending, borrower retention, refinancing opportunities, relationships with mortgage brokers, and competition for control over U.S. homeowners.

Why Is Rocket Mortgage Suing United Wholesale Mortgage

This lawsuit centers on mortgage servicing rights (MSRs), which represent a significant asset for mortgage companies. Retaining servicing rights enables a company to collect mortgage payments, manage escrow accounts, and maintain communication with borrowers. Additionally, servicing rights provide opportunities for borrower retention and loan refinancing.at Rocket Mortgage

Rocket Mortgage Claims Against UWM

Reports state that Rocket claims UWM sold Mr. Cooper the servicing rights for approximately 182,000 home loans that leave an unpaid principal balance of $65 billion.

Rocket claims that these servicing rights were sold with non-solicitation clauses, meaning that UWM would not solicit these borrowers for refinancing, either directly or indirectly.

UWM allegedly used refinancing incentives, broker outreach, and technology tools to target these borrowers. Rocket claims this increased the prepayment rates of the loans, which, in turn, Mr. Cooper claims, reduced the value of the servicing rights.

The lawsuit seeks damages of almost $100 million, in addition to other claims for relief the court may allow.

UWM Denies All Claims

UWM’s resistance has been firm, as a UWM spokesperson reportedly stated that the lawsuit was “baseless and opportunistic” and questioned its timing following Rocket’s acquisition of Mr. Cooper.

It is important to note that UWM has not been found liable. Rocket Mortgage is currently alleging claims against UWM. The case will proceed to litigation, where disputes are expected regarding contractual terms, broker rights to contact borrowers, prepayment provisions, and claims for damages.

What Are Mortgage Servicing Rights?

After closing on a mortgage loan, the servicing rights grant the mortgage servicer the right to service the loan. The tasks the servicer performs include collecting monthly mortgage payments, managing escrow accounts, filing and managing mortgage statements, providing customer service, and communicating with borrowers for loan payoff, loss mitigation, and refinancing.

MSRs hold value because they create servicing income. A borrower relationship can lead to possible future borrower business for refinancing or mortgage purchase, which is the key reason for non-solicitation agreements that accompany the sale of servicing rights.

If servicing rights are sold to a servicing company at a premium, the servicing company is likely to expect that the selling company would not attempt to refinance these specific borrowers. The servicing asset becomes worthless if the borrowers refinance too soon, as the loan would simply pay off.

Why Prepayments Are A Big Deal In This Lawsuit

According to Rocket Mortgage’s allegations, the loans included in the sale of UWM servicing rights exhibited prepayment rates 2.5 times higher than those typically expected for an average loan pool. When a borrower prepays a loan and it exits the servicing portfolio, the anticipated servicing income is lost.

With respect to the UWM servicing rights, the borrowers’ refinance rate was so high that it effectively destroyed the value of those rights.

For mortgage professionals, the most significant aspect of the lawsuit is that it is not simply about the entity that originated the loans. It is actually about the ability of an entity that sells servicing rights to pursue refinance business with borrowers subject to that particular servicing rights contract, despite a non-solicitation covenant.

Why Rocket’s Mr. Cooper Acquisition Is Significant

On October 1, 2025, Rocket Companies completed its purchase of Mr. Cooper, stating that it had integrated the top home loan originator and the leading mortgage servicer in the country, with an almost 10 million servicing portfolio.

Mr. Cooper’s purchase of the servicing rights from UWM is important to this acquisition because Rocket, Mr. Cooper’s parent company, is now claiming the servicing asset’s damages.

Currently, servicing portfolios represent the primary area of competition within the mortgage market.

Why This Case Could Matter To Mortgage Brokers

Because UWM is a wholesale lender, they require independent mortgage brokers to a great extent. Although Rocket’s history was built on a direct-to-consumer lending model, they later opened wholesale lending via Rocket Pro TPO.

This case may have significant implications for the broker community, including the following considerations:

Is it possible for brokers to refinance a borrower to a different loan from the previous loan that was part of a different loan pool?

Independent mortgage brokers stick with clients and keep in touch about rate changes. The case will address the broker’s refinance activity and whether it can be linked to the lender’s solicitation.

Where is the differentiating line of borrower retention as opposed to the lender’s solicitor?

It is commonly accepted that mortgage companies compete to earn repeat business from borrowers. This can lead to complications when a loan is sold to another lender with a non-solicitation clause.

Potential Changes in MSR Sales

If the evidence is persuasive enough to sway the court in Rocket’s favor, future servicing rights transactions could carry more burdensome language, increased monitoring, and harsher penalties for soliciting borrowers.

Real-World Implications for Homeowners

First and foremost, the lawsuit has no impact on the validity of a homeowner’s mortgage. In addition, borrowers should be assured that they have not violated any laws in any capacity.

Not only do homeowners have the right, by law, to refinance their mortgages once eligible to do so, but they also have the right to refinance their mortgages when the act of doing so is financially beneficial.

The lawsuit has been initiated as a result of a contractual dispute between two (or more) mortgage companies concerning servicing rights, the solicitation of borrowers, and the alleged damages arising therefrom. Borrowers, as always, should review their potential loan options, the expenses that will be incurred as a result of the refinance, the break-even point, and the act of refinancing in general, if economically advantageous.

GCA Forums News Review

One of the primary reasons this lawsuit has garnered so much media attention is its association with nearly every significant issue in the mortgage industry today. The issues include (but are not limited to) servicing rights, borrower retention, wholesale and direct lending to consumers, refinance recapture, and competition between brokers. The lawsuit also raises questions concerning the value of customer relationships.

Rocket has claimed that UWM violated certain non-solicitation agreements regarding servicing rights. These rights were sold to Mr. Cooper, with UWM refuting Rocket’s claims. UWM has argued that Rocket’s claims are entirely without merit, and the court has, thus far, made no determinations in regard to the claims.

At present, the lawsuit has resulted in a legal battle between two of the largest mortgage companies, with far-reaching implications for how services will be retained and for the contracts that mortgage companies will enter into in the future.GCA Forums News, in collaboration with Gustan Cho Associates, will continue to monitor this case, as it is expected to have far-reaching consequences for mortgage brokers, wholesale lenders, servicing portfolios, and homeowners considering refinancing. Borrowers should ensure they meet mortgage guidelines, understand the true costs associated with refinancing, and maintain clear communication with their chosen wholesale lenders.

https://finance.yahoo.com/markets/stocks/articles/mortgage-giant-rocket-sues-rival-192804052.html

finance.yahoo.com

Rocket Mortgage sues rival UWM for $100M

The suit marks the latest battle between mortgage lenders led by Rocket Companies Chairman Dan Gilbert and UWM CEO Mat Ishbia.

[Gustan Cho]

For GCA Forums MLO Training Bootcamp, The Best Lesson Is This:

A mortgage loan originator should not try to buy builder referrals. Instead, build trust by solving buyer problems, protecting contracts, explaining financing clearly, and closing on time. itself in builder relationships by serving new-construction buyers who may lack ideal credit or documentation. Some home buyers may present lower credit scores, higher debt-to-income ratios, self-employment income, prior bankruptcies or foreclosures, collections, credit disputes, or complex income scenarios. Builders require lenders capable of conducting thorough assessments beyond basic pre-approval to determine true closing potential.

Experienced mortgage professionals can add real value in these situations

Contacting A Builder

Initial Builder Outreach Script

“Hello, my name is [Name], and I’m a licensed mortgage loan originator. I specialize in helping buyers qualify for new construction financing, especially buyers who may need FHA, VA, USDA, conventional, jumbo, or alternative loan options. I noticed your community has homes in the [price range] range, and I believe I may be able to help reduce buyer fallout by reviewing files early, identifying issues upfront, and communicating clearly with your sales team. I would appreciate the opportunity to introduce myself and show you how we help builders protect contracts and close more buyers on time.”

Follow-Up Script After Meeting A Builder

“Thank you for meeting with me. Based on our conversation, it sounds like your biggest concerns are buyer qualification, rate-lock timing, and last-minute loan issues before closing. I would like to offer a second-opinion review process for any buyer who has been denied, delayed, or told they do not qualify. There is no pressure and no obligation. My goal is to help your team save more contracts and give buyers a clear path forward.”

How To Become A Preferred Lender For A Home Builder

Home builders often collaborate with select lenders for referrals; however, establishing these partnerships requires sustained effort. Builders seek lender partners who facilitate client approvals, address inquiries, minimize loan fallout, maintain clear communication, and ensure timely closings.

Builders prioritize a client’s ability to close the loan upon completion of construction over initial pre-approval status. The extended timeline for new home construction introduces numerous variables that may affect a buyer’s ability to close.

Why Builders Use Preferred Lenders

Preferred lenders enable builders to increase home sales and expedite closings. These lenders possess in-depth knowledge of the builder’s communities, price ranges, timelines, buyer demographics, and available incentives.

Good builder lender partners can assist with:

• speedy and precise pre-approvals
• options for FHA, VA, USDA, conventional, jumbo, and non-QM loans
• extended rate-locks
• temporary and permanent buydowns
• educating buyers prior to signing contracts
• facilitating the builder’s sales team to maintain regular communication
• offering second opinions for denied and tough buyers
• ensuring timely closings

If a lender is unreliable, it can lead to delayed closings, canceled contracts, unhappy clients, and unsold homes. A lender’s performance is crucial to the builder-lender relationship.

Getting In The Door

To initiate a partnership with a builder, prioritize demonstrating value. Rather than immediately requesting referrals, illustrate how your services address the builder’s specific challenges.

Before meeting with a builder, research their communities, including average home prices, typical buyer profiles, current incentives, preferred lenders, and sales velocity. This preparation enables you to articulate how you can support their sales pipeline, structure complex loans, maintain communication throughout construction, and ensure timely closings. The more a builder perceives an MLO as a value-add, the more likely they are to work with you. Your goal is to get in the door and show that you can solve problems.e reliable partnerships. They want MLOs to be honest with builders about a buyer’s qualifications and to maintain constant communication. Builders also expect MLOs to prevent loan issues before close.

What Builders Want

Builders seek robust pre-approval systems, clear communication, prompt responses, and support with complex loan files. They value MLOs who are knowledgeable about new-construction loans, builder incentives, and first-time homebuyer programs. Builders place trust in MLOs who preserve contracts, achieve high closing rates, and minimize fallout. Compliance is essential; MLOs must not compensate builders for referrals. Payments for desk rent, marketing, sponsorships, or advertising may pose significant compliance risks, as they may be interpreted as referral payments.

If a builder provides incentives for buyers to use a preferred lender, buyers must retain the freedom to select any lender. Incentives should remain optional, transparent, and fully disclosed. MLOs should obtain compliance approval before participating in advertising, sponsorships, co-marketing, or desk rental arrangements. The most effective lending relationships are founded on value and service rather than financial inducements for referrals.

Best Strategy to Lend to Builders

The besThe best strategy is to offer builders a complete lending package. Let them know that the most effective strategy is to present builders with a comprehensive lending package. Clearly communicate your identity, available loan programs, pre-approval procedures, communication protocols during construction, and methods for mitigating buyer fallout risk. Competent MLOs should offer second-opinion reviews, as builders often lose clients when buyers are incorrectly deemed unqualified due to restrictive overlays, suboptimal loan structuring, or limited program options. Lowers who may not qualify with other lenders. Buyers with lower credit scores, higher debt-to-income ratios, self-employment, past bankruptcy or foreclosure, credit issues, or complex files can still have options if the loan is structured correctly.

Final Thoughts

Being a home builder’s preferred lender is built on trust, consistency, and being a good partner. Establishing oneself as a preferred lender for home builders requires trust, consistency, and effective partnership. Builders seek lender partners who facilitate sales, safeguard contracts, support buyers, and ensure timely closings. To achieve this status, emphasize transparent communication, reliability, and compliance. Providing clear explanations of loan options and adhering to regulatory standards significantly enhances an MLO’s value to builders. buyers succeed.

PLEASE READ THIS GUIDE ON HOW TO BECOME A PREFERRED LENDER FOR A HOME BUILDER

https://gustancho.com/how-to-become-a-preferred-lender-for-a-home-builder/

gustancho.com

How To Become a Preferred Lender For a Home Builder

Learn how to become a preferred lender for a home builder, Get builder referral partnerships, earn trust, and avoid RESPA compliance mistakes.

[Gustan Cho]

Kash Patel FBI Controversy: Verified Facts, Media Claims, And Public Trust Crisis

Kash Patel’s FBI is facing a public trust crisis as allegations over travel, girlfriend security, internal firings, drinking claims, and political retaliation dominate national headlines. While some claims remain unproven, the controversy raises serious questions about leadership, optics, and the future credibility of the FBI. The investigation into Kash Patel can be categorized into three areas: confirmed facts, reported claims, and unsubstantiated rumors. The Bureau has confirmed that Kash Patel will assume the role of the FBI’s ninth Director on February 20, 2025.

Kash Patel Is FBI Director, But He Was Not A Career FBI Agent

His professional background includes legal work as a Public Defender, national security prosecutions at the Department of Justice, positions in Congress on Intelligence and the National Security Council, service as Deputy Director of National Intelligence, and Chief of Staff at the Department of Defense. His official biography does not indicate prior service as a Special Agent or as a career FBI executive.

Kash Patel FBI Controversy: What Is Verified And What Is Alleged?

Nikita Krushchev famously stated that he became the Soviet Union’s leader without advancing through its ranks. A similar observation has been made regarding Kash Patel; however, the more salient issue is his lack of FBI experience. While Patel’s career extends beyond legal practice to include roles as a Public Defender and prosecutor, he did not acquire operational experience within the FBI or serve as a Special Agent prior to his appointment as Director.

Kash Patel FBI Controversy

Allegations regarding Patel’s alcohol consumption remain unsubstantiated. The majority of these claims originate from articles in The Atlantic, which also reported on his alleged excessive absences. Patel has denied these accusations, characterized them as false, and initiated a $250 million defamation lawsuit against The Atlantic and its reporter. The Atlantic maintains confidence in its reporting.

Did Kash Patel Have Law Enforcement Experience Before Leading The FBI?

According to the AP, Patel, during a Senate budget hearing, rebuffed the allegations, saying they were “unequivocally, categorically false.”

According to Reuters, Senate Democrats asked Patel about the allegations of his “conspicuous inebriation and unexplained absences,” and PatePatel faces allegations concerning his alcohol use and job performance. He denies these claims and has initiated legal proceedings. To date, none of the allegations have been substantiated in court. claims and is taking legal action. To date, none of the allegations have been proven in court.

The Girlfriend FBI Detail Reporter Investigation: Did Kash Patel Use FBI Resources To Impress His Girlfriend?

This section presents more detailed reporting that requires careful explanation. According to the Associated Press, the New York Times reported on an FBI investigation into whether one of its reporters violated anti-stalking laws while covering the assignment of federal agents to protect and transport Patel’s girlfriend, country singer Alexis Wilkins. The FBI stated that agents interviewed Wilkins following a death threat she made, but no further action was taken.

Kash Patel FBI Controversy: What Is Verified And What Is Alleged?

This shows that there is a legitimate reason to question the FBI’s commitment of their resources to Wilkins. However, some oThis raises valid questions about the FBI’s use of resources for Wilkins. However, more dramatic claims—such as Patel ordering a SWAT team for himself, agents being pulled from other duties, or reports that he ‘went livid’—come from media reports and anonymous sources. These claims remain unverified unless supported by documents, witnesses, or officials. There was enough controversy that a New York Times reporter wrote an article about it, and the FBI subsequently launched an inquiry. The FBI has stated that the inquiry was in reference to a death threat and that they took no further action.

FBI Jet And Travel Controversy

Public criticism regarding Patel’s travel has been substantiated. He was called to testify about the potential misuse of government funds for personal trips, including his attendance at the Winter Olympics in Italy, where he was observed celebrating with the U.S. Men’s Hockey Team.

Patel stated that his presence was related to the FBI’s security operations at the Olympics and that the trip facilitated the transfer of a cybercriminal to the United States.

Recent reports also allege that FBI agents accompanied Wilkins to luxury events and participated in a ‘VIP snorkel’ trip at Pearl Harbor using FBI jets. These incidents are characterized as reported controversies that remain under review.

The Patch / FBI Jacket Story

The account concerning Patel and the FBI patch originates from media reports and possibly from leaks or informal feedback by current or former FBI employees. There is no official finding from the Inspector General. Reports indicate that Patel was criticized for requesting an FBI raid jacket and patches during a field response. Patel has either mocked or denied aspects of the story. In the absence of independent confirmation, this should be regarded as ‘reported internal criticism’ only.

Firings And Polygraphs

This matter represents a significant concern for the institution. According to the Associated Press, Democrats questioned Patel regarding ‘mass terminations’ of agents involved in Trump-related investigations. Reuters further reported that Democrats are concerned his leadership could undermine public trust.

Why The Kash Patel Story Is Exploding Across The Media

Some reports indicate that certain senior FBI officers were required to undergo polygraph tests during investigations into leaks or concerns about loyalty. Patel has denied any misconduct during public hearings. The most accurate characterization is that concerns regarding firings, leak investigations, and the use of polygraphs under Patel have formed the basis of congressional testimony, although the underlying motivations—whether political retribution or internal discipline—remain unclear.

The Difference Between Verified Facts, Anonymous Reports, And Political Commentary

The confirmed facts do not substantiate the claim that ‘Kash Patel is a drunken clown who is abusing the FBI for his girlfriend.’ This narrative appears to originate from media and political framing.

Why This Story Matters For The FBI, Law Enforcement, And Public Trust

Kash Patel is a highly controversial FBI Director. He was confirmed following a partisan confirmation process, lacks experience as an FBI agent, and was appointed by President Trump. Since assuming office, his leadership and management style have been subject to intense scrutiny.

“Kash Patel’s FBI Faces Public Trust Crisis As Travel, Staffing, Drinking Allegations, and Political Retaliation Claims Intensify.” Kash Patel faces growing FBI controversy over leadership, travel, girlfriend security claims, firings, polygraphs, and public trust concerns.

FBI staff have raised concerns regarding morale, travel, resource allocation, protection for his girlfriend, removal of senior agents, use of polygraphs, and his reported alcohol consumption. Patel has denied most of the serious allegations and is pursuing legal action against The Atlantic. Several claims remain unproven, and many issues continue to generate significant controversy.

https://www.youtube.com/watch?v=sHrecvNaXa8

[Gustan Cho]

Great question. I operate a net mortgage branch. Both my branch and myself as an individual are licensed in 48 states, including Washington, DC, Puerto Rico, and the U.S. Virgin Islands. I am also a DBA of the mortgage broker company. Prior to my current sponsoring mortgage broker, I operated under my own trade name and not a DBA. I remember getting conflicting answers to this very question you are asking and even to this very day, I am getting conflicting answers which I will find out.

Transferring a CrossCountry Mortgage net branch license or DBA to New American Funding is not a simple process. CrossCountry Mortgage branches are tied to CrossCountry’s NMLS records. Any approvals or changes to branch, DBA, or MLO sponsorship will be at New American Funding’s discretion and processed through its NMLS records. New American Funding, LLC, is listed on NAF’s state licensing page as NMLS #6606.

Estimated Costs to Open a New American Funding Branch in 10 States

Total costs depend on the states involved, their licensing requirements, the process for establishing a New American Funding branch, and onboarding expenses. Additional fees may include compliance, technology, and DBA review costs.

Confirmed Costs:

• NMLS charges a $25 processing fee for each Form MU3 filed.
• For 10 states, this totals $250.
• This amount covers only the NMLS processing fee.
• Each state may impose additional fees for branch licensing, registration, amendments, or renewals.
• For example, New Mexico charges a $500 branch license fee and a $500 annual renewal fee.
• Texas and Utah have their own fee structures that vary by licensing type and include both NMLS and state application fees.
• Upper range: $7,500 to $15,000 or more
• If the 10 states have higher fees, additional licensing requirements, mandatory physical offices, registered DBA filings, legal reviews, compliance consulting, or state-specific advertising approvals, total costs will increase significantly.

Key Point: Branch Licensing Is Typically a Company Expense, Not a DBA Expense

Branch licenses are issued to the mortgage company, not the DBA. If you transition to New American Funding, the branch will be established under New American Funding, LLC.

• In NMLS, the Branch Form MU3 is linked to the company’s NMLS records.
• A branch filing can only proceed after the Company Form MU1 is completed.

Accordingly, New American Funding Would Likely Need To:

• Add or approve your branch location.
• File Form MU3 branch applications or necessary branch amendments.
• Acknowledge the states where your branch needs to be licensed.
• Add your DBA/trade name where applicable.
• Sponsor your MLO license under NAF in the necessary states.

How DBA Transfer Usually Works

• Your DBA will not automatically transfer from CrossCountry Mortgage to New American Funding.
• NMLS considers DBAs as Other Trade Names.
• Your DBA will not transfer automatically from CrossCountry Mortgage to New American Funding.
• NMLS says that licensees do not need to include “DBA” before the trade name; it should be recorded as advertised or as in the documents.
• NMLS states that applicants and licensees must include all Other Trade Names as indicated on a Branch Form on the Company Form.
• In summary, for your branch to operate under the name “Your DBA Name,” New American Funding must properly include and authorize the name in its NMLS company and branch records as required in a branch license.

Estimated DBA Costs Include:

• State/county assumed-name filing: usually between $10 and $150+, depending on the area.
• Multiple states: $100 to $1,500 or more, depending on the number and location of filings.
• Attorney or compliance assistance: $500 to $2,500 or more, if needed.
• NMLS trade name amendments: State filings and reviews may be required, depending on the state.
• Internal company review: May incur additional costs, depending on New American Funding’s approval procedures.
• Some states require evidence to ensure the firm legally uses the trade name.
• For example, a Texas branch checklist states that if a branch is operating under an “Other Trade Name,” “Assumed Name,” or “DBA,” it must be listed under Other Trade Names and may require an assumed-name certificate to be filed with the Texas Secretary of State.

Can You Retain the Same DBA Name?

It is possible, but you must first verify the following:

• Determine legal ownership of the DBA.
• If it is filed under your personal or branch entity, the process is usually more straightforward.
• If CrossCountry owns the DBA, you may need a release or a new filing.
• Many mortgage companies closely control branch branding, so even if a state allows the DBA, New American Funding compliance may not.

Verify whether the 10 states permit the use of the DBA for mortgage advertising. Some states have stricter regulations on advertising, branch names, and trade names, even if the DBA is properly registered.

How to Transition from CrossCountry Mortgage to New American Funding

The Following Steps Are Recommended:

Step 1: Obtain a Written Offer from New American Funding

Obtain a written branch offer from New American Funding before leaving CrossCountry.

Ensure it addresses the following questions:

• Will CrossCountry approve your DBA?
• Will CrossCountry approve your branch location?
• Which 10 states will CrossCountry sponsor you in?
• Who is responsible for state branch fees?
• Who is responsible for MLO sponsorship fees?
• Who is responsible for DBA filings?
• Who is responsible for NMLS MU3 branch filings?
• Will your LOs follow you to CrossCountry?
• Will compliance approve your website, phone number, CRM, email, marketing, and social media?

Step 2: Confirm DBA Details with New American Funding

Ask NAF compliance or licensing:

• Can New American Funding add my DBA as an Other Trade Name on MU1 and MU3 for the states where my branch will operate?
• NMLS allows companies to amend Other Trade Names through an Advance Change Notice process when adding, modifying, or deleting a trade name on the company MU1 filing.

Step 3: Review Your CrossCountry Agreement

Before you move anything, review your CrossCountry net branch agreement for the following restrictions.

• Marketing asset ownership
• Phone number ownership
• Website/domain ownership
• CRM/database ownership
• Pipeline restrictions
• Branch P&L obligations
• DBA ownership language
• Outstanding chargebacks, EPOs, or branch losses

Step 4: Officially Resign

• Proceed carefully to avoid licensing lapses, borrower confusion, RESPA-related issues, advertising complications, and disruptions to your loan pipeline.
• Do not assume that CrossCountry will permit the transfer of live loans to New American Funding unless a specific transfer process is established. nsorships
• For each moving MLO, their NMLS sponsorship must be changed to New American Funding.
• NMLS indicates that the MLO change-of-sponsorship fee is $35.
• At $35 per sponsorship, transferring 10 loan originators would cost $350, excluding any additional proprietary or state-specific fees.

Your Situation

If you are a DBA of a CrossCountry Mortgage net branch and plan to establish 10 branches with New American Funding, the estimated costs are as follows:

• Branch licensing, state setup, and NMLS: $3,000 to $10,000 or more

DBA registration and trade name setup: $500 to $3,000 or more

MLO sponsorship transfers: $35 per transfer in NMLS

Legal or compliance review: $1,000 to $5,000 or more, if outside counsel is used.

Internal NAF onboarding or branch costs: Unknown; only NAF can provide this information.

A reasonable estimate for total costs is $5,000 to $15,000 or more, depending on your net branch configuration, DBA setup, and the costs absorbed by New American Funding.

Questions to Ask New American Funding

Suggested questions:

• “Can New American Funding approve my existing DBA and add it as an Other Trade Name in NMLS for my branch?”
• “Which of my 10 target states require a branch license, branch registration, or physical branch location?”
• “Who pays the state branch licensing fees, NMLS MU3 fees, DBA filings, and MLO sponsorship transfer fees?”
• “Can my existing branch website, phone number, Google Business Profile, social media pages, and marketing assets move with me?”
• “Will my DBA appear on borrower-facing disclosures, advertising, NMLS Consumer Access, and branch pages?”
• “Can my current LOs transfer sponsorship directly from CrossCountry Mortgage to New American Funding?”
• “Are there any states where NAF will sponsor me personally but not approve my DBA or branch location?”

Conclusion

This process should be treated as a new branch setup under New American Funding, not a direct transfer from CrossCountry Mortgage. Your DBA may be reused only if you have legal control, there are no restrictions from either company, New American Funding approves it, and each state permits its use through NMLS and state regulations. For 10 states, do not rely solely on the $250 NMLS branch fee, as this is only the base MU3 processing cost. The total will likely be several thousand dollars, including state fees, DBA filings, sponsorship changes, compliance review, and company onboarding.