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Mortgage broker or licensed lender bond cost

The Vermont Department of Financial Regulation mandates that all mortgage brokers and licensed lenders working within the state secure a surety bond. The amount of this bond varies according to how much the broker processes in loans on an annual basis. If it is between $0 and $2,000,000, the bond amount is at least $25,000. If it falls between $2,000,000 and $5,000,000, the bond amount is at least $50,000. If it lies between $5,000,000 and $15,000,000, the bond requirement is at least $75,000. If it is greater than $15,000,000, then the bond amount is at least $100,000. If licensed lenders process between $0 and 1,000,000, the bond amount is at least $50,000. If it is between $1,000,000 and $15,000,000, the bond requirement is at least $100,000. If it is greater than $15,000,000, the bond amount is at least $150,000. This bond is valid until December 1 of every year.

Due to the variance of bond amounts, our underwriters have to review your credit report before we can provide you a quote for your bond. Unsure if your credit qualifies? There’s no need to worry, as we employ a bad credit bonding program that is designed to help people like you!

Why this bond

These bonds help ensure the principal (mortgage broker or licensed lender) adheres to the terms of the bond and avoids facilitating any deceitful or fraudulent business practices. This bond explicitly refers to Title 8, Chapter 73 of the Vermont Statutes Annotated. Other legislation relating to mortgage brokers includes Regulation B-2014-02 from the Vermont Banking Division. Breaches of this legislation include:

  • providing a prospective borrower with a rate lock
  • accepting discount points or other funds from a prospective borrower for the purpose of buying down a rate of interest
  • accepting and keeping escrow waiver fees or other fees associated with terms of the loan
  • issuing a commitment letter
  • closing a loan in his or her own name

If the principal violates the terms of the bond, the obligee can file a claim against the bond. Valid claims require the surety to compensate the obligee for any losses up to the penal sum of the bond.

Mortgage broker and licensed lender bonds are required by the Vermont Department of Financial Regulation. The bond amount depends on how much the mortgage broker or licensed lender processes in loans on an annual basis. Since every mortgage broker and licensed lender must renew his or her license before December 1 of every year, bond renewals must also occur before that time (unless bond is issued November 1 or after, then it is valid for next succeeding year). If the surety wishes to terminate the bond, it must send the principal and the Vermont Commissioner of Banking, Insurance, Securities and Health Care Administration a 60-day written notice of cancellation. The surety remains liable for all claims filed within this 60-day period.

Become a mortgage broker

Mortgage brokers and licensed lenders must receive an approved license before they can begin working. Brokers and lenders must obtain their licenses through the Nationwide Mortgage Lending System (NMLS). Information required for license approval includes:

  • license application fee
  • fingerprints for submission to Federal Bureau of Investigation
  • personal history and experience
  • authorization for NMLS to obtain an independent credit report and credit score
  • authorization for NMLS to obtain information related to any administrative, civil or criminal findings by a governmental jurisdiction

The NMLS website is available in the “Important Links” section. There you can find all the information you need to successfully submit a mortgage broker license application.

 

Apply for your surety bond

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