Reviewed Financials for Wisconsin Mortgage License Application

Reviewed Financials for Wisconsin Mortgage License Application

Reviewed financials are required for the Wisconsin mortgage license application. To become a licensed mortgage banker or broker in Wisconsin, several conditions must be met. The mortgage banker license requires a bond of $300,000 and a minimum net worth of $250,000. The mortgage broker license requires a bond of $120,000 and a minimum net worth of $100,000. Both license applications require a reviewed financial statement prepared by a Certified Public Accountant to accompany the application.

According to the Nationwide Mortgage Licensing System, applications require applicants to:

Upload a reviewed financial statement prepared by a Certified Public Accountant in accordance with Generally Accepted Accounting Principles. Financial statements should include a Balance Sheet, Income Statement and Statement of Cash Flows and all relevant notes thereto.

What is a Reviewed Financial Statement?

A reviewed financial statement is an evaluation of a company’s financial statements that is one step below an audit.  The CPA typically performs inquiries and analytical procedures to obtain limited assurance that no modifications to the statements are necessary.  In this case, the reviewed financial statement must include a Balance Sheet, an Income Statement, a Statement of Cash Flows, and a Statement of Changes in Stockholders’ Equity (if applicable). The review will also include a written statement from an independent CPA, certifying that the review has been conducted in accordance with generally accepted accounting principles and the American Institute of CPAs’ professional standards.

Meeting the Net Worth Requirement

The company’s net worth is simply its total assets, less the company’s total liabilities.  Wisconsin’s Department of Financial Institutions further specifies that the net worth minimums should be based on “tangible assets,” less liabilities.  This means that any intangible-type assets would be eliminated from total assets.  Examples of intangible assets are receivables from officers, stockholders, and other related parties, employee advances, trade receivables over 120 days old, and any other assets of questionable value which are typically discounted by the division while evaluating the financial statement. The net worth of your business will be confirmed by the CPA preparing the reviewed financial statements required for your Wisconsin mortgage license.

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Assistance from an Experienced CPA

An experienced CPA can help determine if the company’s assets meet Wisconsin’s minimum net worth requirements and if not, offer potential strategies on how to attain the minimum net worth.  Once a determination is made that net worth is acceptable, our CPAs can keep you informed on the preparation and review of the financial statements, while completing the review in a timely fashion.

If you require a reviewed financial statement for your mortgage banker or broker license application, our team of CPAs is available to assist you.

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2023-10-30T16:21:26+00:00May 31st, 2023|Business, Financial Reporting|

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