• Michigan loan officers must be licensed to write mortgage loans.business 3 image by Nathalie P from Fotolia.com
  
  Like all states, Michigan closely monitors the more than 7,000 mortgage brokers and bankers doing business in the state. Each must adhere to laws pertaining to accurate record keeping, allowable property types, and disclosure of their lending practices. Michigan has severe penalties for violating mortgage rules. Michigan mortgage professionals are often subject to fines, loss of license and imprisonment for not adhering to state laws.
  
  

Accurate Record Keeping

• Michigan law require lenders to retain accurate records of every mortgage application completed in the state. Institutions must retain client files, regardless of whether a loan was made, for a minimum of 25 months. For clients who were rejected, a reason for rejection must be included in their file. Files of approved loans must include proof that a loan was made and must be stored for 25 months or until the loan is paid in full.
  
  

Disclosure of Lending Guidelines

• According to the Michigan Mortgage Lending Practices Act of 1977, lenders and brokers are required to make available to their applicants printed materials that explain their lending guidelines, consumers rights and steps to take if applicants are denied financing. These are required to be in pamphlet form and must be made available in all offices that originate mortgage loans.
  
  

State Licensing Requirements

• In Michigan, all professionals who originate mortgage loans for a fee must possess a valid originator's license. Individuals are not permitted to write loans or work as a loan officer in any capacity until they have passed the state licensing examination. Owners of brokerage or mortgage banking firms must possess a broker's or banker's license in addition to a individual loan officer's license. All licenses must displayed in each office and visible to the clients and state auditors.
  
  

Allowable Property Rules

• In Michigan, single-family homes, multi-unit buildings, manufactured homes and commercial buildings are eligible as security for real estate loans. Lenders may consider the condition of eligible properties when making lending decisions but are not permitted to approve or deny financing based on age of properties or geographic location. Lenders are permitted to approve or deny financing based on the condition of structures within 750 feet of subject properties.
  
  

Conventional and Special Loan Products

• Conventional mortgage programs, VA loans and programs offered by FHA are open to Michigan applicants. Michigan also offers special programs aimed at low- to moderate-income families. These programs are offered through the Michigan State Housing Development Authority and come with down-payment assistance and competitive rates and terms.