Mortgage broker bond cost
The Texas Department of Savings and Mortgage Lending mandates that mortgage brokers post $50,000 surety bonds. These bonds remain valid for a period of 2 years, which is the same duration as the mortgage broker license. The price you’ll pay for your Texas mortgage broker bond is based on a review of your personal credit report.
Why this bond
Mortgage broker bonds in Texas protect the public from unlawful business practices committed by the principal (mortgage broker). Specifically, these bonds ensure that principals comply with the provisions of the Texas Mortgage Broker License Act. The following acts are prohibited under this bond agreement:
- obtaining a license through fraud
- publishing a misleading or deceitful advertisement
- failing to use a fee collected in advance for the purpose for which fee was paid
- charging a fee for assisting a mortgage applicant before all services have been performed
- attempting to induce a party to breach a contract so the individual may make a mortgage loan
- discriminating against a prospective borrower
- and more
If the principal breaches any of the terms of the bond agreement and consumers are harmed as a result, the surety will cover all damages up to the full bond amount. The principal, in turn, must reimburse the surety for any damages paid out.
Mortgage broker bond details
The Texas Department of Savings and Mortgage Lending requires all mortgage brokers in the state to post a $50,000 surety bond. The term of this particular bond is equivalent to the duration of the license period, which is 2 years.
The surety can cancel this bond at any time by providing the Commissioner of the Department with a written cancellation notice 30 days prior to the effective termination date.
Become a mortgage broker
Mortgage brokers in Texas must licensed through the National Mortgage Licensing System. The application must be accompanied by a licensing fee of $375 and a recovery fund fee. Applicants must meet the following requirements to be eligible for a Texas mortgage broker’s license:
- be at least 18 years of age
- be U.S. citizen or lawfully admitted alien
- have a physical office in the state
- have a bachelor’s degree in a banking field and have 18 months of experience in the mortgage and lending field or have 3 years of experience in the mortgage lending field
- not have been convicted of a criminal offense that directly relates to the mortgage lending field
- possess and maintain net assets of at least $25,000
- and more
Once a mortgage broker receives his or her license, it remains valid for 2 years. It must be renewed on or before the expiration date for the mortgage broker to continue legally working in Texas.
Apply for your surety bond
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