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I agree as far as running it as business. In regards to licensing, not all states require a processor to be licensed in order to work as a contract processor, or may require specific means of compensation to be in compliance of the state law . A contract processor should be well aware and verse in the Mortgage laws of the states they plan to process in! In regards to insurance, I agree that a contract processor should be insured to protect themselves.
I also would encourage any Broker seeking the services of a Contract Processor or a Processing Company to fully investigate them before sending them any files. Look at the history of the processor/company, look at the resumes of the processor/company processors, look into other business affiliations either has. The Broker needs to be well informed of whom he/she is working with and sending their files to.
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