What Types of Mortgage Broker Licenses Are Issued in Oregon?
What most states refer to as a mortgage broker license is called a mortgage lender license in Oregon. An Oregon mortgage lender license allows the licensee to broker residential mortgage loans as well as make them. Mortgage lender licenses are issued to both companies and sole proprietorships. Oregon also licenses mortgage servicers and mortgage loan originators.
What Does the Licensing Process Involve?
Although the Division of Financial Regulation regulates and oversees Oregon�s mortgage industry and issues licenses for mortgage lending professionals, applications must be submitted through the National Mortgage Licensing System (NMLS). There is a non-refundable $100 NMLS user fee in addition to a non-refundable application fee of $960.
Applications must identify the �Experienced Person� (Qualified Individual), usually the sole proprietor, company owner, or full-time employee who has been involved in mortgage lending for a minimum of three out of the past five years.
All applications, for both new and renewal licenses, must be accompanied by a surety bond. For new license applicants, the required bond amount is $50,000. For renewal licenses, the required bond amount is based on the dollar amount of Oregon residential mortgage loans listed in the mortgage call reports filed for the previous four quarters. The Division of Financial Regulation will send a notice stating the required renewal bond amount prior to the license renewal date.
Why Is a Surety Bond Required?
A mortgage broker surety bond is required as protection for the state and consumers against financial losses caused by the unlawful or unethical mortgage brokering or lending practices of a licensed mortgage lender. The bond serves as the mortgage lender�s guarantee to comply with all relevant Oregon laws and the rules established by the Division of Financial Regulations identified in the surety bond agreement.
A surety bond agreement is a legally binding contract among three parties:
- The Division of Financial Regulation, as the party requiring the bond, is the obligee
- The mortgage lender or broker is the principal
- The company issuing the bond is the surety
Any violation of the terms of the surety bond agreement can trigger a claim against the bond, which the principal is legally responsible for paying.
What Happens if a Claim is Filed?
Upon receiving notice of a claim, the surety will investigate to verify the claim�s validity. If found to be valid, the surety will then attempt to negotiate a settlement. If no agreement is reached, the surety will typically pay the claim, but only as an advance on behalf of the principal. The principal is then required to reimburse the surety. In essence, the advance payment by the surety is a short-term loan to the principal.
What Does a Mortgage Broker Bond Cost?
Nearly all surety bonds are sold for a premium that is a percentage of the required bond amount. That percentage, known as the premium rate, is determined by the surety based on the principal�s personal credit score and financial standing. Applicants with good credit generally pay a premium that is between 1% and 3% of the bond amount, while those with poor credit will pay a higher rate.
Get Bonded Today
Use our convenient online system to apply for the surety bond you�ll need to get your Oregon mortgage lender license.