Minnesota Mortgage Originator and Servicer Bonds

Get a Free Quote for Your Minnesota Mortgage Bond Today

Who is Required To Purchase a Minnesota Mortgage Surety Bond?

As mentioned above, there are four licenses required to purchase a surety bond:

• Individual mortgage originators
• Mortgage originator companies
• Mortgage servicer companies
• Individual mortgage accelerated payment providers

There are license exemptions in regards to getting an originator license and a servicer license. Even if you meet the requirements and approval to be exempt from licensure, as an originator you're required to purchase a surety bond. Exempt servicers are not required to purchase a surety bond.

Why is a Minnesota Mortgage Bond Required?

The Minnesota Commerce Department is responsible for setting the requirements for all of these mortgage licenses.

These requirements are designed to only allow serious mortgage professionals to get licensed and legally conduct business in the state.

And yet, despite these requirements, every year a handful of licensed mortgage companies will 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

Remember, the surety bond acts as a legal promise that you will follow all the regulations, laws, and service your customers with good business practices.

If a customer falls victim to mortgage fraud, they can make a claim against the company or individual for financial compensation. However, the maximum amount for a claim is the amount of the bond.

This bond amount is set by the Commissioner of the Commerce Department.

What Are The Minnesota Mortgage Originator and Servicer Bond Amounts?

Residential Mortgage Loan Originators

All mortgage loan originators are required to purchase a surety bond in the following coverage amounts.

This applies to individual originators. However, if an individual originator is a full time employee of a company, they will be covered by the company bond.

The bond amounts are based on the total dollar amount of closed residential mortgage from the previous calendar year.

Residential Mortgage Servicer Companies

Mortgage servicing companies are required to purchase a bond or provide an irrevocable letter of credit.

Because electing to use a letter or credit typically requires the fully amount to be deposited in a low yielding bank account, most licensees elect to purchase a surety bond for a small fraction of the required bond amount.

The following bond amounts are based on the total portfolio of unpaid mortgage loans being serviced.

Individual Mortgage Accelerated Payment Provider.

If you're seeking this license, you have a flat bond amount of $100,000.

This individual bond requirement ensures that the payments from the borrowers will be applied to the balance of their mortgage and not stolen or misused.

How Much Does a Minnesota Mortgage Surety Bond Cost?

Minnesota mortgage bonds are credit driven. This means your mortgage surety bond 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

Most mortgage surety bonds are credit driven. No matter where you go to purchase your bond, your personal credit will be a required factor to obtain pricing.

But this is a great reason to work with Surety Bonds Direct.

As a specialized surety agency, we work with the highest rated sureties to price shop for and secure the lowest possible price.

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.

These rates can be vastly different from surety to surety, sometimes multiple percentage points different. Let's look at example pricing so you can see how big of a difference this rate makes.

The price you pay is one payment for the entire bond term, 12 months for Minnesota mortgage surety bonds.

Mortgage Surety Bond Price Example

Let's look at the $125,000 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.

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

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

Use the money you save to pay off application fees, education fees, or examination fees.

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

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 Minnesota Mortgage Surety Bond Last?

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

While licenses in Minnesota expire on December 31st each year, the bond term is 12 months from your expiration date at which time you'll:

• Assess your bond amount and update it if necessary
• Pay your renewal premium to keep your bond active

We Make Renewing Your Mortgage Surety Bond Easy

Renewing a mortgage originator, servicer, or payment provider 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 Bonds And Getting Your Minnesota Business License/Registration

The entire step by step process is broken down in the NMLS checklist and you can use the Commerce Department, as they link off to the actual laws.

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

Step 1: Provide Your Banking Setup

You must provide the banking details for your company's trust accounts that hold only client funds.

This account must not commingle funds held for payments to lenders or other business operations related funds.

Step 2: Formation Document and Trade Names

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

If you're using a trade name, you must upload a copy of the Certificate of Assumed Name from the Minnesota Secretary of State.

You must also include a Certificate of Authority. This is only required for out of state companies and shows you're authorized to do business in the company's state of formation.

Step 3: Business Plan, Management, and Organizational 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: 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.