Massachusetts Mortgage Loan Originator or Lender Bond

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Who is Required To Purchase a Massachusetts Mortgage Broker Bond?

The Massachusetts Division of Banks and Licenses requires a surety bond for:

• Mortgage lenders
• Mortgage brokers

These surety bonds are company bonds meaning the individuals getting licensed do not have to purchase a bond. They are covered by the company bond.

Why is a Massachusetts Mortgage Loan Originator or Lender Bond Required?

The Massachusetts Division of Banks and Licenses is responsible for the licensing guidelines for mortgage lenders and brokers.

The licensing process is designed as a set of standards to only allow professional and reputable professionals to get a license. Plus, a license is legally required to lend and broker mortgages in the state.

Despite the licensing process, every year there will be a handful of licensed mortgage companies that 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 surety bond requirement is the primary tool - besides the licensing process - the Division of Bank Licenses has to hold mortgage companies accountable to the promises they make to their customers.

If a mortgage company chooses to financially harm a customer, the customer can make a claim against the mortgage surety bond for financial compensation. However, the maximum amount for a claim is the amount of the bond.

Every mortgage surety bond has an amount set by the Division of Banks Licenses.

What Are The Massachusetts Mortgage Lender and Broker Bond Amounts?

Individual Mortgage Loan Originators

If you're an individual mortgage loan originator, you're required to purchase a mortgage surety bond in an amount that reflects the dollar amount of loans originated as determined by the Commissioner.

From our experience helping the originators this bond tends to be $25,000.

If you require a larger amount, via the Commissioner, we can help you get bonded for that amount, just tell us about it on our online quote form.

You do not need this bond if you're a full time employee or you're a registered agent of mortgage company. In this case you're covered by the company bond.

Mortgage Lending Companies

The minimum bond amount for mortgage lending companies is $100,000 and the maximum is $500,000.

The Commissioner of the Division will determine the bond amount based on the amount of mortgages being written.

There are no set caps or ranges to determine these amounts. From our experience working with hundreds of mortgage lenders doing business in Massachusetts, the bond amounts tend to be:

But if you require a different amount, let us know and we will help you purchase your bond for as little as possible.

Mortgage Broker Companies

Mortgage broker companies have a set bond amount of $75,000 regardless of how many loans are written or the total dollar amount of those loans are.

Remember this bond amount is the maximum amount of financial compensation available to customers in the event they are financially harmed by a mortgage professional.

How Much Does a Massachusetts Mortgage Surety Bond Cost?

All Massachusetts mortgage bonds are credit driven. This means you'll require a custom price primary based upon:

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

The fact that this bond is credit driven is a standard. Regardless of where you ultimately purchase your bond, a soft credit check will be required to secure your bond.

The custom price is determined from a rate quote by a surety.

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

Every surety will conduct their own analysis and quote a rate based on the above factors.

And this is why working with Surety Bonds Direct can save you hundreds, even thousands of dollars on your bond price.

We work with the highest rated sureties who write mortgage lender and broker bonds.

• We price shop for you
• Find the lowest possible price
• And help you purchase your surety bond.

Finding you the lowest pricing doesn't cost you anything. And with this information you can make the right decisions as you get through the licensing process.

Use the money we save you and pay off other application fees, education fees, or examination fees. You'll probably have a lot left over to use for other purposes.

Request your free quote right now or call a bond specialist at 1-800-608-9950.

Mortgage Surety Bond Price Example

Let's look at the $100,000 bond amount for example pricing and rates.

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?

After you agree to a price, purchasing your bond is as easy as completing an online checkout form.

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

We provide you with detailed instructions to help us file your bond. The process takes only a few minutes.

If you require help, we can assist you to make sure this is done correctly.

How Long Does a Massachusetts Mortgage Surety Bond Last?

When you purchase your bond, you choose an effective date. This is the date your bond becomes active.

For mortgage lenders, the bond expires 12 months from this effective date.

Individual mortgage originators and mortgage broker companies have a hard bond expiration date of December 31st each year.

This means you'll need to assess your bond amount and renew it during this time for the subsequent 12 month period.

We Make Renewing Your Mortgage Surety Bond Easy

Renewing a mortgage lender, broker, or originator 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.

Mortgage Loan Originator or Lender Bonds And Getting Your Massachusetts Business License/Registration

The Division has a PDF where you can find a step by step breakdown of getting your lender and broker license.

Under downloads, click on the PDF titled: 209 CMR 42.00: The Licensing of Mortgage Lenders and Mortgage Brokers

Here's a brief breakdown of the common steps between the two licenses.

Step 1: Provide Your Financial Statements

You must upload audited financial statements including:

• Balance sheet
• Income statement
• Cash flow statement
• Changes in stockholder equity (if and when applicable)

For mortgage lenders, there is a $200,000 minimum net worth requirement.

Mortgage broker companies have a $25,000 minimum net worth requirement.

Step 2: Key Contact Designations

Qualifying Individual

This is the on-site manager or the business manager and typically required to pass all the required education and examinations.

Resident or Registered Agent

This is the individual or entity that will receive and service any legal process on behalf of the applicant

Primary Contact Employees

These include a primary company contact employee and a company complaint contact.

Non-Primary Employees

This includes a list of:

• Accounting
• Exam billing
• Licensing
• Exam delivery
• Litigation
• Legal
• Pre-exam contact

Step 3: Business Plan And Management Chart

You must include a full outline of:

• Marketing strategies
• The suite of products and services
• Target markets
• Fee schedules
• Operating structure
• Policies and procedures
• Access to credit markets
• Records and retention policy

The management chart outlines all of the directors, officers, and managers by name and title.

A separate organizational chart must be included outlining the direct, indirect, subsidiaries, and affiliates of the company.

Step 4: Formation Document and Trade Names

Include copies of all the formation documents on file with the Secretary of State including any registered trade names.

Step 5: Complete the Application and Submit

There are future requirements that are dependent on individual business decisions.

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