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Who is Required To Purchase a Maryland Mortgage Broker Bond?
As we've mentioned, the following license classifications required to purchase a mortgage license surety bond:
- Mortgage lenders
- Mortgage brokers
- Mortgage services
Mortgage Lenders
Lenders are responsible for underwriting the actual mortgage loan. Lenders may employ individual mortgage loan originators if they also broker or sell loans.
Mortgage Brokers
Brokers are companies that employ individual loan originators to help their customers find the right loan for their goals.
Mortgage Servicers
Servicers are companies responsible for the day to day accounting of the mortgage loan. This includes managing balances, payments, and late payments.
Each license is required to purchase a surety bond in an amount that matches their license and the size of their business.
Individual Mortgage Loan Originators
This is the license classifications for individuals who sell mortgage loans. There is no bond requirement for this license as each licensee is covered by the company's surety bond.
What Are the Maryland Mortgage Surety Bond Amounts?
Remember, the surety bond is used as a guarantee that you will follow all laws and service your customers fairly.
The bond amount is the maximum amount of financial compensation afforded to your customers.
Here are the bond amounts based on license type and business size.
Mortgage Lending and Brokering Companies
The Department of Labor makes this a little easier, requiring the same amount for both lenders and brokers.
| Mortgage Dollar Volume | Bond Amount |
|---|---|
| $0 to $5 million | $50,000 |
| Over $5 million to $25 million | $100,000 |
| Over $25 million to $100 million | $250,000 |
| Over $100 million to $250 million | $500,000 |
| Over $250 million | $750,000 |
Mortgage Servicing Companies
The dollar figure includes loans serviced under MSRs, loans sub-serviced for others, and loans sub-serviced by others
| Mortgage Dollar Volume Serviced | Bond Amount |
|---|---|
| $0 to $10 million | $50,000 |
| Over $10 million to $100 million | $100,000 |
| Over $100 million to $1 billion | $250,000 |
| Over $1 billion to $50 billion | $500,000 |
| Over $5 billion | $750,000 |
Exempt Mortgage Businesses and/or Individuals
Some individuals and businesses are exempt from licensure but must still register through the NMLS.
If an example individual or business employs or sponsors one more licensed mortgage loan originators, they must purchase a surety bond with one of the following amounts.
| Mortgage Dollar Volume | Bond Amount |
|---|---|
| $0 to $3 million | $50,000 |
| Over $3 million to $10 million | $100,000 |
| Over $10 million | $150,000 |
Remember, your particular bond amount is the maximum amount of monetary protection available to your customers.
Get Your Bond Pricing Today
You can get instant pricing for your Maryland mortgage surety bond. Click the button below. You need to know the amount of your bond.
Need Help? Call Us Today
Talk to a bond specialist today. They will help you find the surety bond you need and get you the lowest possible price. 1-800-608-9950
Why is a Maryland Mortgage Lender Bond Required?
The Department of Labor not only wants to license the most qualified and reputable mortgage businesses, they want to hold each license holder accountable to the promises they'll make to their customers.
This is the sole purpose of the surety bond.
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 charging fabricated fees
If a customer is financially harmed from these actions or similar, they can make a claim against the company's surety bond for financial compensation.
To recap:
- The mortgage surety bond holds your company accountable to the licensing laws and promises you make your customers
- The bond amount is the maximum level of financial compensation available to your customer base
How Much Does a Maryland Mortgage Surety Bond Cost?
The price of a mortgage surety bond will be custom based on each business. This is because mortgage surety bonds are credit driven.
A special insurance company called a surety is responsible for underwriting these bonds.
The surety will primarily look at the following 3 factors when assessing an applicant:
- Personal credit of the business owner or owners
- Mortgage and all financial lending experience
- Prior bond claims if any owner has been licensed in the past
Based on this assessment the surety will quote a rate and the rate multiplied by your bond amount is the price you'll pay.
Mortgage Surety Bond Rates Vary
Every surety is different in how they assess an applicant. This means rates can vary, often by a large margin.
We've seen the same applicant get rates that are two to three percentage points different.
And when it comes to mortgage surety bonds, this means the amount of money you can save can be in the thousands of dollars.
We are a surety bond agency, and it's our job to find you the lowest possible rate so you can save money.
Mortgage Surety Bond Pricing With Example Rates
Here is example pricing so you can see how the price changes drastically based on the rate.
The rates used in the table are from really good to average.
Let's use the $100,000 bond amount in this example.
| Bond Amount | Premium Rate | Total Cost |
|---|---|---|
| $100,000 | 0.05% | $500 |
| $100,000 | 1% | $1,000 |
| $100,000 | 1.5% | $1,500 |
| $100,000 | 2% | $2,000 |
| $100,000 | 3% | $3,000 |
You can get your pricing today and know exactly what you will have to pay to meet this license requirement.
And if you're not ready to purchase, all quotes are guaranteed for 30 days so there is no rush or pressure if you're not ready to purchase.
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.
If you prefer to speak with a bond specialist, you can call 1-800-608-9950.
What Do You Do After You Purchase Your Maryland Mortgage Surety Bond?
Once you're ready to purchase your bond, all you have to do is complete an online checkout form.
After your payment is complete, our bond issuance team will get to work preparing your bond with the:
- Correct bond form
- Requires signatures and seals
- Power of attorney
Mortgage bonds are e-filed with the National Multi-State Licensing Agency (NMLS).
We will e-file your bond for you to make the licensing process easier. You'll receive short instructions so we can get this done for you the same day.
How Long Does a Maryland Mortgage Surety Bond Last?
In Maryland you'll have to renew your bond 12 months after the bonds activation date.
You choose the activation date when you purchase your bond. This is also called the effective date.
But renewing your bond is easy.
As a Surety Bonds Direct customer, you're assigned your own bond specialist to manage your bond for you.
As your renewal date approaches, your bond specialist will contact you to remind you of the expiration date and have renewing pricing ready to go.
If you need to increase or decrease your bond amount, this is when you'll make those changes.
The bonding process is not complicated and it only takes 1 to 2 business days once you request your price quote.
Click below and get this done today.
Get Your Bond Pricing Today
You can get instant pricing for your Maryland mortgage surety bond. Click the button below. You need to know the amount of your bond.
Need Help? Call Us Today
Talk to a bond specialist today. They will help you find the surety bond you need and get you the lowest possible price. 1-800-608-9950
Mortgage Lender Bonds And Getting Your Maryland Business License/Registration
Each license has slightly unique requirements. Here are the high level steps so you know what to expect.
Use the NMLS Checklist Compiler to help with the details of each step.
Financial Statement and Net Worth
Each business must have an audited balance sheet proving a minimum net-worth based on the aggregate mortgage lending from the previous 12 months.
This also changes based on the license type.
For mortgage lenders and brokers the net-worth ranges from $25,000 to $250,000 on the high end.
Mortgage services have a net-worth range of $100,000 to $1,000,000.
If you can't meet your specific requirement, there are deposits and other assets that may be required.
Business Formation Documents
You must provide copies of your business formation documents filed with the Secretary of State.
This includes outlining any trade names you will use throughout the course of business.
Management and Organizational Chart
The management chart must show:
- Directors
- Officers
- Managers
This must also outline the compliance reporting and internal audit structure of the business.
The organization chart outlines:
- Direct owners
- In-direct owners
- All subsidiaries and affiliates
Identify the Resident Agent and the Qualifying Individual
The resident agent must be on record with the Maryland Department of Assessment and Taxation.
The qualifying individual is the person who has at least 3 years of experience in the mortgage lending business and manages the day to day office responsibilities.
Business and Marketing Plan
You will need to upload the business and marketing plan including:
- Marketing strategies
- Products
- Target markets
- Fee schedules
- List of services
- List of vendors
Plus you must keep a log of all business activity throughout the year.
Criminal Background Checks
The last major requirement is a criminal background check of all owners and indirect owners.
Additional Maryland Mortgage Lender Bond Resources & Links
Maryland Department of Labor, Licensing and Regulation - Applications and Forms
What is a Mortgage License Bond or MLO Surety Bond?
Getting a mortgage broker, lender, or servicer license requires a license bond or mlo surety bond. Learn what this bond is and how to purchase it fast.
How to Become a Mortgage Broker
Becoming a mortgage broker can be a fun and highly fulfilling career.
Licensing Requirements for Mortgage Loan Originators
It's simple getting a mortgage originator license right? Not so much. Learn the steps including how to get your surety bond.
Can't find what you need?
Let our bond experts help!
Get Started »
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