Illinois Residential Mortgage License Bond

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Who is Required To Purchase an Illinois Residential Mortgage Company Bond?

The Illinois Department of Finance and Professional Regulation requires this bond for all residential mortgage companies.

A residential mortgage company is responsible for:

• Brokering mortgages
• Funding loans
• Purchasing and servicing loans

And just to recap, broking a loan means helping your customer find the right mortgage for their financial and property requirements.

Funding the loan means actually writing and providing the capital for the loan.

Servicing the loan requires managing the monthly payments, late payment, and all loan accounting.

Individual mortgage loan originators are brokers and will work for a company. As an individual... you are not required to purchase a bond. You will be covered by your company's mortgage surety bond.

Illinois Mortgage Fidelity Surety Bond Requirement

Illinois has a unique bond requirement for out of state companies who do have have an in state office. This bond requirement is called a fidelity surety bond.

While there are actually three types of fidelity bonds, they are referring to an employee theft or dishonesty bond.

This bond protects customers from an employee who may steal money from customers, such as accessing money being held in an escrow account.

Why is an Illinois Residential Mortgage License Bond Required?

The Illinois Department of Financial and Professional Regulation is responsible for setting the licensing requirements for mortgage companies and individual mortgage originators.

These licensing requirements set the standards you're committing yourself and your business to follow so you can legally conduct business in Illinois.

And despite the licensing process, every year there will be a handful of mortgage professionals and companies who commit mortgage fraud to make more money:

Examples of fraudulent actions can include:

• Approving a borrower for a loan they can't afford
• Helping a borrower get approved for a loan by providing false information
• Hindering a borrower from getting approved by providing false information
• Pressing a borrower to enter a high commission loan to make more money
• Creating and charge fabricated fees

The residential mortgage surety bond is available as financial protection for customers victimized by these and similar actions.

If a customer is financially harmed, they can make a claim against the mortgage bond for financial compensation. The total compensation available only extends to the amount of the bond.

What Are The Illinois Residential Mortgage Bond Amounts?

Remember, only mortgage companies are required to purchase this surety bond.

The amount of the bond will be based on the total previous years dollar amount of loans:

• Brokered
• Funded
• Serviced (including loans purchased)

Here are the bond amounts:

These bond amounts are the maximum amount of financial protection available to customers who may suffer from mortgage fraud.

These bond amounts sound large, but the price to purchase the bond will be a small fraction of the amount you required.

Illinois Mortgage Fidelity Surety Bond

The fidelity bond requirement starts at $100,000 per license.

If you're required to have a larger amount the Department of Finance and Professional Regulation will let you know.

How Much Does an Illinois Mortgage Broker Bond Cost?

The price of a residential mortgage company bond is determined by a rate quoted from a surety.

A surety is an insurance company who chooses to underwrite mortgage broker bonds.

Every surety, while looking at similar factors performs their own, independent, assessment of an applicant considering factors such as:

• Personal credit of the individual or business owner or owners
• Mortgage and other financial lending experience
• Prior bond claims if the individual or owner has been licensed in the past

Based on this assessment the surety quotes a rate.

CALLOUT - This rate multiplied by your bond amount is the price you pay.

So getting a lower rate can save you hundreds, maybe thousands of dollars. And the best way to get a lower rate is using a specialized surety agency like Surety Bonds Direct to purchase your surety bond.

As an agency, we work for you:

• Price shopping for you
• Finding the lowest possible price
• And helping you purchase your surety bond

This costs you nothing and once you get your pricing, you're under no obligation to purchase. This means getting your custom pricing is free information to help you get through the license process faster.

There's no reason to request your free quote right now or call a bond specialist at 1-800-608-9950.

Residential Mortgage Company And Broker Bond Price Examples

Let's look at the $100,000 bond amount for mortgage brokers. (Pricing for the $100,000 fidelity bond would follow the same pricing process.)

Pay attention to the rates and how one percentage point can make huge difference in the price, saving you hundreds of dollars.

You can see the rate you're quoted can make a huge difference.

And while example pricing is great, you can get your exact price with no risk or obligation to purchase within one business day.

Go request your price quote today. Remember, this is free information for you. There's no obligation to purchase. Quotes are good for 30 days.

How To File Your Mortgage Broker or Lender Bond?

Purchasing your bond is as easy as completing an online checkout form.

After your payment is processed, our issuance team will immediately begin the process to issue your bond with the National Multi-State Licensing System.

The National Multi-State Licensing System (NMLS) is an organization Illinois and many states use to help manage the occupational licenses for mortgage and other financial based licenses.

We make getting your bond uploaded and activated in the NMLS fast and easy.

How Long Does an Illinois Residential Mortgage Broker Bond Last?

The Illinois Department of Financial and Professional Regulation requires an active surety bond on file with the NMLS at all times to legally conduct business in Illinois.

The residential mortgage broker bond has a bond term or 12 months from the effective date.

The effective date is the date your bond becomes active. You choose this date when you purchase your bond.

12 months from this date, your bond will have to be renewed.

In some cases you can purchase your bond for multiple years, but this is done on a case by case basis. To find out if this is an option for you, call a bond specialist today at 1-800-608-9950.

How Do You Renew a Mortgage Company Bond?

Renewing a mortgage broker and lender bond is easy. As your bond expiration date approaches, your bond specialist will contact you 30 to 45 days in advance to ensure you don't miss paying the renewal premium.

Your bond specialist will have renewal pricing already quoted allowing this process to get finished with little headache or effort.

Once you pay the renewal premium, your bond remains active. You don't have to do anything.

Residential Mortgage License Bonds And Getting Your Illinois Business License/Registration

Here's a brief breakdown of each step.

Step 1: Checkoff All Prerequisites

There are a few key prerequisites you must meet or complete before you submit your license application.

• Meet a minimum net-worth of $50,000 for mortgage broker companies
• Meet a minimum net-worth of $150,000 for mortgage companies without an Illinois office
• Credit check and full report
• 3 years of mortgage or lending experience or the equivalent coursework

Step 2: NMLS Registration

You will need to create an account and profile with the NMLS. This is where you will upload all of your application paperwork including e-filing the surety bond.

Step 3: NMLS National Background Check

You are required to complete the NMLS background check. This background check typically will include both an FBI (federal) and Illinois background check.

Step 4: Outline Your Business Registration

You must upload copy of the appropriate business registration with the Secretary of State:

• The corporate charter
• Articles of incorporation
• Articles of organization and operating agreement
• Partnership agreement

From the Secretary of State, you must also provide a certificate of good standing, showing that your company is authorized to do business in Illinois.

This includes any registered trade names that are legally registered with Illinois.

Step 5: Purchase Your Surety Bond or Bonds

As we've discussed above, you must purchase your residential mortgage surety bond.

If you're an out of state company with no in state offices, you must also provide the fidelity or employee dishonesty surety bond.

Step 6: Financial Statements

You must provide during licensure and on a yearly basis independent audited financial statements from a Certified Public Accountant.

This audit should include the:

• Balance sheet
• Income statement
• Cash flow statement
• And all relevant notes for each

Step 7: Complete the Application and Submit

Complete your NMLS application with the required proof and scores from all the above steps.