Blog Posts Categorized: Mortgage Loan Originators

What Types of Mortgage Licenses Are Issued in Tennessee?

The Tennessee Department of Financial Institutions (DFI), which regulates the mortgage and real estate industries, issues mortgage licenses to companies, branch offices, and individuals. The same mortgage license is granted to brokers, lenders, and mortgage servicers. Applicants specify which one or which combination of these types of work they will be doing under their Tennessee mortgage license.

What Does the Licensing Process Involve?

Mortgage license applications are submitted to and processed online by the Nationwide Mortgage Licensing System (NMLS). However, the originals of some DFI-specific documents must be mailed directly to the Tennessee Department of Financial Institutions, Compliance Division, Tennessee Tower, 312 Rosa L. Parks Avenue, Nashville, TN 37243.

Tennessee does not require applicants for a mortgage license to take a pre-licensure course or pass an exam before applying for a Tennessee mortgage license, but NMLS does. There are other DFI requirements that must be met:

• Surety Bonds. Brokers must provide a $90,000 surety bond. Mortgage lenders and servicers, and anyone serving in two or more of these roles must purchase a bond in the amount of $200,000.
• Fees. All applicants must pay both a licensing fee to the state of Tennessee and an NMLS processing fee.
• Business Information. Mortgage brokers must prove a minimum net worth of $25,000, provide an accounting of their business/employment history for the preceding 10 years, and disclose any criminal history or negative financial facts—all of which will be verified by DFI.

Why Is a Surety Bond Required?

All license bonds, including Tennessee mortgage license bonds, are designed to guarantee that licensees will conduct business in accordance with all applicable laws, rules, regulations, and industry standards. License bonds provide financial protection for consumers who suffer a loss due to the unlawful or unethical business practices and actions of the licensee.

A Tennessee mortgage license bond specifies the conduct required of the licensee. Any violation of the terms of the surety bond contract can result in a claim being filed against the bond by the party who has experienced a financial loss because of that violation.

What Happens if a Claim is Filed?

Understand that a surety bond agreement is a legally binding contract involving three parties:

• The Tennessee Department of Financial Institutions is the obligee, the party requiring the bond.
• The license applicant is the principal, the party required to purchase the bond.
• The company that underwrites and issues the bond is the surety.

When a claim is filed against the bond, the surety will first investigate the circumstances and make sure that the claim is valid. If it�s possible, the surety will then negotiate a settlement that the principal will pay. However, if that negotiation is unsuccessful, the surety will pay the claim.

That payment from the surety, however, is only an advance that must be repaid by the principal. In effect, the surety is lending money to the principal to give the principal time to liquidate assets or otherwise gather the funds needed to cover the claim amount. The terms of the surety bond contract indemnify the surety and obligate the principal to reimburse any such advance.

What Does It Cost?

The cost of any surety bond is typically a small percentage of the required bond amount. That percentage, the annual premium rate, is based largely on the applicant�s personal credit score and financial strength. The surety is assuming a financial risk and needs to know that the applicant is creditworthy enough to reimburse the surety for any claims paid on his or her behalf.

Bond applicants with good credit typically pay no more than 3% of the required bond amount. Applicants with poor credit may pay a higher premium rate.

Understanding the Costs of Surety Bonds for Mortgage Licensing

If you need a mortgage license bond to get or renew your Tennessee Mortgage License, request a quote online or give us a call today.

Types of Licenses Issued in Virginia

In Virginia, mortgage brokers are licensed by the Virginia Bureau of Financial Institutions (BFI), which regulates and supervises licensed mortgage brokers, lenders, and loan originators. Companies, branches, and individuals all must be licensed to engage in this kind of work.

This article focuses on the process for obtaining a Virginia mortgage broker license, which allows companies and sole proprietorships to engage in finding, negotiating, and placing:

• First and second mortgages
• Home equity lines of credit
• Reverse mortgages
• High-cost mortgages
• Mortgage loan modifications

The Licensing Process

Nationwide, all mortgage-related license applications are submitted through the National Mortgage Licensing System (NMLS). While most documents can be uploaded through NMLS, some documents required by the Virginia Bureau of Financial Institutions must be mailed directly to the Bureau.

Licensing requirements specific to Virginia mortgage broker licenses include:

• A criminal background check
• A credit check and evidence of financial responsibility, character, reputation, industry experience, and general fitness
• Payment of a non-refundable NMLS processing fee ($100) in addition to a non-refundable BFI application fee ($500) and fees for a state criminal background check ($25) and credit check ($15)
• A surety bond in the amount of $25,000.

Why Is a Bond Required?

A surety bond required for licensure in a given profession is classified as a license and permit bond. License and permit bonds are commonly required for businesses and professions that serve consumers. They guarantee that licensees operate in a legal and ethical manner, abiding by state laws and industry standards, as specified in the terms of the bond.

A surety bond agreement is a legally binding contract between three parties:

• As the entity requiring the bond, the Virginia Bureau of Financial Institutions is the �obligee.�
• As the party required to purchase the bond as part of the licensing process, the mortgage broker is the �principal.�
• The company issuing the bond is the �surety.�

The roles and responsibilities of all three parties are spelled out in the surety bond contract. If the principal violates the terms of the contract and causes someone to suffer a financial loss, that party can file a claim against the mortgage broker bond.

What Happens if a Claim is Filed?

When a claim is first received, the surety will conduct an investigation into its validity. If the claim is found to be valid, the surety will attempt to negotiate a settlement. If no settlement can be reached, the surety typically pays the claim and then seeks reimbursement from the principal.

An indemnification clause in the surety bond contract relieves the surety of any obligation to pay claims. That obligation belongs solely to the principal.

What Does the Bond Cost?

The principal will pay an annual premium that is a small percentage of the required bond amount. The surety determines the premium rate on a case-by-case basis, depending largely on the principal�s personal credit score and financial circumstances. Applicants with good credit will usually pay the standard market rate of 1% to 3% of the $25,000 bond amount. Those with poor credit will likely pay a higher premium rate because of the greater risk to the surety.

Understanding the Costs of Surety Bonds for Mortgage Licensing

Request an online quote today, or give us a call to discuss your mortgage broker bonding needs.

What Types of Broker Licenses Are Issued in Georgia?

The Georgia Department of Banking and Finance, Non-Depository Financial Institution (NDFI) Division regulates and licenses mortgage brokers and lenders�companies and branches as well as individuals.

• The Georgia Mortgage Broker/Processor License permits the solicitation, processing, placement, and negotiation of residential mortgage loans.
• The Georgia Mortgage Lender License permits the origination, making, servicing, and purchase of residential mortgage loans.

What Does the Licensing Process Involve?

License applications are submitted through the Nationwide Mortgage Licensing System (NMLS), but all other licensing requirements must first be met. If you submit your application without all the required documents, the Department will request that you provide the missing documents, and you�ll only have five days from the original submission date to do that before your application is administratively withdrawn.

Be aware that any license approved between January 1 and October 31 must be renewed during the annual license renewal/registration period, which runs from November 1 to December 31.

Applicants must submit proof of having purchased a mortgage broker surety bond in the proper amount for their application to be considered complete. Those amounts are:

• $150,000 for a mortgage broker/processor license
• $250,000 for a mortgage lender license

Why Is a Surety Bond Required?

It�s common for states to require people becoming licensed in certain professions to purchase a surety bond as a guarantee that the licensee will conduct business in accordance with all applicable state laws and industry standards. Those requirements are spelled out in the terms of the surety bond contract.

Every surety bond contract is a legally binding agreement between three parties:

• The entity requiring the contract, in this case, NDFI, is the obligee
• The mortgage broker purchasing the contract is the principal
• The company issuing the bond is the surety

License bonds, such as a mortgage broker bond or mortgage lender bond provide financial protection for those who could suffer a loss if the licensee, the principal, acts in an unlawful or unethical manner. Any violation of the terms of the surety bond by the principal can result in a claim being filed against the bond.

What Happens if a Claim is Filed?

The surety will first investigate to make sure that the claim against the bond is valid. If the surety is unable to settle a valid claim, the company will pay it as an advance on behalf of the principal to avoid legal action.

However, the principal is legally responsible for paying claims and must reimburse the surety. The advance payment of a claim is in effect a loan from the surety to the principal, to give the principal time to gather the funds and then reimburse the surety.

What Does a Mortgage Broker/Processor Bond Cost?

The annual premium for a mortgage broker bond (or mortgage lender bond) is a small percentage of the required bond amount. The surety company sets the premium rate for each applicant based on his or her personal credit score and financials. The rate is generally between 1% and 3% for applicants with good credit, and higher for applicants with poor credit.

Understanding the Costs of Surety Bonds for Mortgage Licensing

Request a quote today, and let us get you the surety bond you�ll need to obtain your Georgia mortgage broker/processor license.

Learn how to become a mortgage broker in Louisiana, and contact Single Source Insurance today to get the mortgage broker bond you need.

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Mortgage Broker Licenses in Louisiana

In Louisiana, companies and sole proprietorships that provide mortgage brokering and lending services, and the individuals working for them as loan originators, are licensed by the Louisiana Office of Financial Institutions (OFI). �The most common licenses are the:

• Residential Mortgage Lending License, which permits mortgage brokers, lenders, or services to engage in making, originating, negotiating, and placing residential mortgage loans, and the
• Mortgage Loan Originator License, which allows their employees (sponsored mortgage loan originators) to take applications for residential mortgage loans and offer or negotiate mortgage loan terms.

What Does the Licensing Process Involve?

Applicants for either of these licenses must complete certain pre-licensure educational requirements and pass an exam. Once licensed, a certain number of hours of continuing education must be completed annually as a condition of license renewal. License applicants must also undergo a criminal background check and credit check.

License applications (for new licenses, renewals, and updates) are submitted through and processed by the Nationwide Mortgage Licensing System (NMLS). The NMLS website is your source for detailed information about and instructions for applying for the various licenses issued to mortgage professionals in Louisiana. Licensing and testing fees are paid, educational courses are approved, and testing is scheduled through NMLS as well.

While most of the documents required when applying for a mortgage lending or mortgage loan originator license are uploaded to NMLS, some agency-specific documents, including a required surety bond, must be mailed directly to OFI.

Surety Bond Requirement

There is a category of surety bonds�License and Permit bonds�that are required at the state level for certain kinds of businesses to protect the public against financial loss due to the unlawful or unethical behavior. These bonds guarantee that licensees operate in accordance with all applicable laws, rules, and regulations�or pay the price.

The surety bond contract is a legally binding agreement that establishes the roles and responsibilities of three parties:

• As the agency requiring the bond, OFI is the obligee.
• As the party required to purchase the bond, the license applicant is the principal.
• As the party underwriting and issuing the bond, the surety company is referred to simply as the surety.

The obligee establishes the required bond amount and what the principal must do to remain in compliance with the terms of the surety bond and avoid claims against the bond. The required amount is either $25,000 or $50,000 for both brokers/lenders and loan originators, depending on the applicant�s loan volume in the previous year. That is the maximum amount of money that a party who has been financially harmed by the licensee’s actions can claim against the bond and is referred to as the bond’s “penal” amount.

What Happens if a Claim is Filed?

When a party files a claim, the surety will investigate to make sure the claim is valid. If the surety is unable to negotiate a settlement with the claimant, the surety will pay the claim as an advance on the principal�s behalf.

Surety bond contracts indemnify the surety company against any legal responsibility for paying claims. Ultimately, the principal bears the full burden of paying claims and must reimburse the surety in full for advance payments made by the surety.

What Does a Mortgage Broker Bond Cost?

The annual premium for a Mortgage Lender or Mortgage Originator license is a small percentage of the required bond amount. The surety bases that percentage, the premium rate, on the principal�s personal credit score and financial strength. Applicants with good credit will usually pay the standard market rate of between 1% and 3% of the required bond amount. Credit-challenged applicants will pay a higher premium rate.

Understanding the Costs of Surety Bonds for Mortgage Licensing

At Single Source Insurance, our surety experts will help you obtain the mortgage bond you need to become licensed as a Louisiana mortgage professional or to renew your existing license.

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What Types of Broker Licenses Are Issued in California?

There are three different types of broker licenses in California:

• The California Finance Lender or Broker License (CFL) issued by the California Department of Business Oversight (DBO) allows licensees to broker loans only with others holding a CFL.
• The California Residential Mortgage Lender License (CRML), also issued by DBO, allows licensees to make and service residential loans in California and also to broker loans to other CRML lenders and to banks and credit unions if they hold a mortgage loan originator’s license in addition to a CRML.
• The Real Estate Broker License issued by the Bureau of Real Estate (BRE) allows licensees to function as both mortgage brokers and real estate brokers in California.

What Does the Licensing Process Involve?

The licensing and application requirements, paperwork to be submitted, and licensing and processing fees differ for each type of license. For example, applicants for a license from DBO must meet certain personal net worth requirements, though the amounts are different for residential and non-residential lenders/brokers. There is no net worth requirement for obtaining a Real Estate Broker License from BRE.

Another major point of difference is the requirement to pass a broker examination, which only applies if obtaining a Real Estate Broker License. And while there is a surety bond requirement for getting a CFL or CRNL license, there is none for becoming licensed as a Real Estate Broker.

Why Is a Surety Bond Required?

Surety bonds are required for many state-granted licenses in a wide range of professions as a way to ensure that no innocent party suffers a financial loss as a result of the unlawful or unethical business practices of a licensee. The surety bond requirement for mortgage brokers in California ensures that bonded licensees comply with the California Residential Mortgage Lending Act, the California Finance Lenders Law, and other applicable statutes.

By purchasing the required surety bond, licensees are guaranteeing that they will comply with the law, honor their agreements with clients, and refrain from any unethical business practices. They enter into the surety bond agreement knowing that violating any of the terms of the bond can result in one or more claims being filed against the bond, which can end up costing them a great deal of money.

What Happens if a Claim is Filed?

When a claim is filed, the surety company will first investigate to make sure that it is valid. They typically advance compensation to those with valid claims, but they will then turn to the bonded individual to get reimbursed for the amount advanced. The surety company is indemnified by a clause included in every surety bond contract, making the licensee solely responsible for paying claims.

What Does a Mortgage Broker Bond Cost?

Applicants for a mortgage broker license bond will pay a premium that is a small percentage of the required bond amount�typically between one and three percent for applicants with good credit. Those with poor personal credit will pay a substantially higher premium rate.

Understanding the Costs of Surety Bonds for Mortgage Licensing

Call us today to get a quote on the mortgage broker bond you need in order to become licensed as a California mortgage lender or broker.

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Arizona mortgage brokers, commercial and non-commercial, need a license and a surety bond. Find out how to get licensed and some more information about the surety bond.

Commercial vs. non-commercial mortgage brokers

The two titles mean exactly what they sound like: commercial mortgage brokers negotiate commercial mortgages, while non-commercial brokers negotiate non-commercial mortgages. The licensing process for commercial and non-commercial mortgage brokers is nearly the same and is conducted through the Nationwide Multistate Licensing System (NMLS), as it is for financial professionals in many states.

Some of the information required of both kinds of mortgage broker applicants includes:

• DBAs or any other trade names
• Resident/registered agent information on file with the Arkansas Corporation Commission
• Qualifying/responsible individual (Commercial and noncommercial brokers have different criteria for qualifying individual eligibility.)
• Verification of Experience for qualifying individual
• Background checks for direct owners and qualifying individuals
• $10,000 or $15,000 surety bond
• $36.26 fee per background check
• $800 nonrefundable application fee
• $100 nonrefundable processing fee

This list is not complete, so read your commercial or non-commercial mortgage broker application carefully. These licenses expire annually on December 31, and need to be renewed on or before that date to avoid $25-per-day late fees and eventual license cancellation.

How do mortgage brokers know their surety bond amount?

Commercial and non-commercial mortgage brokers’ bond amount depends on the brokers’ investors. Investors are the entities that lend or invest the money in the mortgage loans. There are two kinds of investors, as defined by Arizona law:

• Institutional investors�State or national banks, savings banks, and credit unions; state or federal savings and loan associations; federal or quasi-federal government agencies; financial enterprises; licensed real estate brokers or salesmen; profit-sharing or pension trusts; insurance agencies
• Non-institutional investors�Anyone who does not fall under the above definition, who provides funds to be used in the making of a mortgage loan, or who purchases mortgages that have already been negotiated by a broker

Mortgage brokers with only institutional lenders need to get a $10,000 surety bond, and those with both or only non-institutional lenders need a $15,000 surety bond. The surety bond is brokers’ promise that they will adhere to laws for mortgage professionals in the Arizona Revised Statutes. This protects customers from fraud, misrepresentation, and other illegal actions on the mortgage broker’s part. The bond also protects the state of Arizona; should a claim be filed on the surety bond, the surety pays the claim and then the bondholder reimburses them, with no loss to the state.

Are you ready to get an Arizona mortgage broker bond? Work with Single Source Insurance to get bonded today!

The Oregon Division of Financial Regulation has begun using the Nationwide Multistate Licensing System (NMLS) to accept applications for mortgage servicer and debt buyer licenses. The license applications were available through the NMLS beginning on November 1, 2017. Financial business licensee applicants in the state—including mortgage servicers—must also begin submitting Electronic Surety Bonds (ESBs).

Many states have adopted use of the NMLS for mortgage loan businesses, money transmitters, and other financial businesses. The system is not a substitute for state licensing entities, rather it serves as a state and federal record of all licensees�mortgage servicers, originators, lenders, collection agencies, etc. Most licenses issued by the Division already accept applications through the NMLS; mortgage loan servicers and debt buyers are both new licenses.

The mortgage loan servicer license is established from a mortgage loan originator license—a business offering both services needs both licenses. Mortgage loan servicers’ licensing rules are still being established, but the Division will begin issuing licenses on January 1, 2018. The Division asks for this and more information:

• Any business trade names
• Registered agent in Oregon
• Completed MU-3 for any branch locations
• $960 license and registration fee plus $100 NMLS processing fee
• $15 for credit report for each control person
• $36.25 for criminal background check for each control person
• $50,000 surety bond
• Financial statements less than six months old
• Proof of each control person’s good character, financial responsibility, and general fitness to operate a financial business

Debt buyers’ licensing law takes effect on January 1, 2018 and separates them from collection agencies. These financial businesses submit much of the same information as other businesses, and pay a $450 licensing fee plus the $100 NMLS fee. Currently, they don’t have a surety bond requirement.

In conjunction with moving application submissions to NMLS, the state of Oregon has begun using ESBs for licensees’ bond requirements. ESBs have been adopted for several states’ licenses, and make it easier to track and maintain the bond. ESBs are no different from surety bonds—besides being a digital rather than physical document. The state of Oregon began using ESBs for financial businesses in April 2017. The state plans to convert surety bonds to ESBs for all financial businesses licensed through the NMLS (and that require a bond) by December 31, 2018. Those that do not convert their bond may be barred from license renewal.

Questions about ESBs or Oregon mortgage servicer surety bonds? Single Source Insurance is here to help!

New York mortgage lenders are required to get a license and purchase a surety bond during that process. Read on to find out how to get licensed and learn more about the surety bond.

How to get a New York mortgage lenders’ license

In New York, mortgage lenders are also called mortgage loan originators. Lenders or originators need to be licensed as such if they take residential mortgage loan applications or offer or negotiate terms of a residential mortgage loan. As in many states, the New York Department of Financial Services (DFS) uses the Nationwide Multistate Licensing System (NMLS) to begin the licensing process for mortgage lenders.

The NMLS has put together a checklist for New York mortgage lender applicants to ensure they submit complete information to the DFS. Before applying, applicants must complete 20 hours of approved pre-licensure education and must meet one of these testing conditions:

1. Passing results on the National and New York State components of the SAFE test, or
2. Passing results on the National and Stand-alone UST components of the SAFE test, or
3. Passing results on the National Test Component with Uniform State Content

Applicants pay a series of fees to get a license:

• NMLS initial processing fee�$30
• New York application fee�$379 (includes $125 investigation fee and $254 license fee)
• Credit report fee�$15
• FBI criminal background check�$36.25
• State criminal background check and fingerprinting fee—$99

The DFS requires submission of the following information through the NMLS:

• Completed Individual Form (MU4)
• Criminal background check authorization
• Credit report authorization
• Disclosure questions and supporting evidence, if applicable
• Company sponsorship submitted by applicant’s employer
• License affirmation certifying that there are no false statements made in the application

Read the checklist to be sure you include all required information, since this list is not exhaustive. License applications deemed complete by the DFS are published in their Weekly Bulletin each Friday. If an application is deemed incomplete, lender applicants have 30 days to complete it. Notice of approval, denial, or incompletion will be mailed to the mortgage loan originator applicant. Licenses expire every year on December 31.

Surety bonds for NY mortgage lenders

New York mortgage lenders do not submit a surety bond until their license has been approved, and they must submit the original bond. The amount of bond lenders need to post depends on the dollar amount of mortgage loans originated in the previous year, as follows:

• Less than $1,000,000�in originated mortgage loans or initial bond amount�$10,000 bond
• $1,000,000-$749,999,999�in originated mortgage loans�$15,000 bond
• $7,500,000-$14,999,999�in originated mortgage loans�$25,000 bond
• $15,000,000-$29,999,999�in originated mortgage loans�$50,000 bond
• $30,000,000-$49,999,999�in originated mortgage loans�$75,000 bond
• $50,000,000 or more in originated mortgage loans�$100,000 bond

The bond is mortgage lenders’ promise that they will follow the Banking Laws of New York Article 12-E. Mortgage loan originators employed by an Originating Entity licensed under Article 12-D of the Law may be covered by an Originating Entity surety bond. That bond amount is based on the number of employees it covers:

• Less than 10�$100,000 bond
• 10-15�$150,000 bond
• 16-24�$250,000 bond
• 25 or more�$500,000 bond

The bond is a reassurance to customers that the mortgage lender or originating entity is following the law, and provides a course of action for reimbursement should the lender break any of those laws. Along with the original bond, entities and individual applicants need to submit a bond certification form, which can be found at the bottom of the DFS’s surety bond instructions page.

Get in touch with Single Source Insurance and get the best rate for your New York mortgage lender surety bond!

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Virginia mortgage brokers and lenders found themselves subject to new regulations earlier this year that include a surety bond requirement. Keep reading to learn more about licensing and surety bonds for brokers and lenders in the state.

Mortgage brokers vs lenders

While mortgage brokers and lenders are licensed similarly, they are not licensed to do the same job. Mortgage lenders originate or make mortgage loans. Mortgage brokers negotiate, place, or find mortgage for others, directly or indirectly, or offer to do so. In Virginia, any company or sole proprietor engaging in the business of mortgage brokering or lending needs to be licensed and bonded.

Virginia mortgage broker and lender licenses

Mortgage brokers and lenders are licensed by the commonwealth’s Bureau of Financial Institutions. As in many states, Virginia mortgage brokers and lenders apply for their license through the Nationwide Multistate Licensing System (NMLS).

The NMLS provides Virginia mortgage broker applicants with a checklist to ensure their application is complete. Some of the information applicants submit for licensure includes:

• $600 application and NMLS filing fee
• $15 credit report fee per control person
• $25 state criminal history check per sole proprietor, director of a corporation, member of an LLC, or anyone with significant management responsibility or more than 10% company ownership
• Filed MU1 company form
• Current financial statements (except sole proprietors)
• Other trade name and/or forced trade name (if applicable)
• Registered agency and primary contact employees
• Business plan
• Certificate of Authority or Certificate of Good Standing
• $25,000 minimum surety bond

This list is not exhaustive�read the application checklist thoroughly to ensure your application is complete.

Mortgage lender applicants submit the same information listed above, in addition to the information in their application checklist. They also need to purchase a minimum $50,000 surety bond, double the amount brokers need. Mortgage lenders use the same bond form as brokers, but each applicant should be sure to specify the correct amount of coverage on the bond.

Surety bonds for mortgage brokers and lenders

After the initial application, Virginia mortgage brokers and lenders’ surety bond amounts are determined annually based on the amount of residential mortgage loans originated in the previous year. The scale is as follows:

• $0-$5,000,000 in originated mortgage loans�$25,000 surety bond
• $5,000,001-$20,000,000 in originated mortgage loans�$50,000 surety bond
• $20,000,001-$50,000,000 in originated mortgage loans�$75,000 surety bond
• $50,000,001-$100,000,000 in originated mortgage loans�$100,000 surety bond
• $100,000,000 ore more in originated mortgage loans�$150,000 surety bond

Though Virginia mortgage brokers and lenders need to have different amounts of bond coverage, both kinds of licensees agree to uphold the provisions of Chapter 16 of Title 6.2 of the Code of Virginia. If a mortgage broker or lender’s malpractice causes financial harm to a client, the client can seek reimbursement through the surety bond. However, the bond’s principal (the broker or lender) must reimburse the surety company for any paid claims. The surety can cancel the bond with 90 days’ notice to the principal and the Commissioner of Financial Institutions.

Ready to get a Virginia mortgage broker or lender surety bond? Single Source Insurance can help you get the best rate!

Georgia mortgage brokers and lenders will need to increase their surety bond amount with the passage of HB 143. Though most sections of the bill took effect on July 1, 2017, Section 24, which mandates the bond increase, will take effect on December 31, 2017.

Mortgage brokers in Georgia is any person who solicits, processes, places, or negotiates mortgage loans. Mortgage lenders make, originate, underwrite, hold, or purchase mortgage loans or service mortgage loans. Mortgage loan originators take mortgage loan applications or negotiate the terms of a residential mortgage loan.

HB 143 will increase the surety bond for mortgage brokers to $150,000, an amount that the Department of Banking and Finance (DBF) can increase. Previously, mortgage brokers’ minimum bond amount was set at $50,000. Similarly, mortgage lenders will need a surety bond that is $250,000 or more if mandated by the DBF, an increase from the current $150,000 bond minimum.

In addition to the bond increases, HB 143 allows licensees and surety companies to cancel surety bonds for mortgage brokers, lenders, and originators electronically through the National Mortgage Licensing System and Registry (NMLSR), also called the Nationwide Multistate Licensing System (NMLS). The DBF requires 30 days’ notice before canceling the bond. HB 143 made the same changes to money transmitters’ surety bond laws and they can now be canceled electronically.

Georgia mortgage brokers and lenders apply online through the NMLS. Licenses must be renewed annually between November 1 and December 31, regardless of when the license was acquired. There are a few nonrefundable fees associated with applying for a mortgage broker license:

• $750 fee including NMLS processing fee
• $15 fee for credit report if one has not been authorized through NMLS in the past 30 days for each control person
• $36.25 for each criminal background check

Review the license application checklist to make sure all information is included with your application. Mortgage lenders must also pay the fees for credit reports and background checks, but their license costs, including the NMLS processing fee, is $1,250. The mortgage lender application checklist is also available through NMLS and should be reviewed before submitting the application.

Mortgage loan originators are also licensed through the NMLS, and must meet certain prerequisites and submit additional information to the DBF. Their license application requires the same credit report and background check fees as brokers and lenders, but their license costs are $130.

Need a surety bond so you can become a licensed mortgage broker, lender, or originator? You’ve come to the right place! Single Source Insurance can help you get bonded today!