Mortgage Broker, Lender or Servicer Bond

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Who Is Required To Purchase a Montana Mortgage Surety Bond?

The following company licenses are required to purchase a surety bond:

• Mortgage lenders
• Mortgage brokers
• Mortgage servicers

Mortgage loan originators who work for a mortgage company are not required to be individually bonded. They will be covered by the company's surety bond.

Just to recap what each of these licenses is responsible for:

Mortgage Lender

A mortgage lender is a company responsible for writing the actual mortgage loan with their own funds.

Mortgage Broker

A broker, also called an originator, is responsible for connecting the borrower with the best mortgage product to fit their financial needs and goals.

Mortgage Servicer

A mortgage servicer is a company responsible for managing the day to day and month to month mortgage lifecycle. This includes handling payments, late fees, and any customer communications.

Why is a Montana Mortgage Bond Required?

The Montana Division of Banking and Financial Institutions is responsible for the licensing guidelines for mortgage companies.

This includes satisfying a series of requirements like:

• Passing examinations
• Submitting financial statements to prove financial stability
• Identifying primary business contacts and a qualifying individual
• Having a well documented business and marketing plan
• Outlining and proving experience requirements

These requirements are detailed more at the end of this page, but this process is designed to qualify and license only the most reputable companies.

And even with these requirements in place, 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

The surety bond and loss of licensure are the primary tools used to hold mortgage companies accountable to the promises they make to customers.

If a customer is financially, and intentionally harmed, they can make a claim against the mortgage bond for financial compensation. However, the claim amount can only be up to the mortgage surety bond amount.

What Are The Montana Mortgage Surety Bond Amounts?

The bond amounts are based on the current loan volume going back the previous 12 months.

Mortgage Lender and Mortgage Broker Companies

Both lenders and brokers share the same levels of outstanding loan production from the previous 12 months and the same bond amounts.

• Less than one year of business history - $25,000
• Over one year of business history to less than $50,000,000 - $25,000
• $50,000,000 to less than $100,000,000 - $50,000
• $100,000,000 or more - $100,000

Mortgage Servicer Company

Mortgage servicers bond amount is based on the balance of unpaid mortgage currently being serviced.

• Less than one year of business history - $75,000
• Over one year of business history to less than $25,000,000 - $150,000
• $25,000,000 to less than $100,000,000 - $150,000
• $100,000,000 to less than $500,000,000 - $250,000
• $500,000,000 or more - $350,000

Click here and get a price quote for your bond. If you’d prefer, you can call a bond specialist at 1-800-608-9950.

Remember these bond amounts are the maximum level or financial protection afforded to borrowers in the event they’re a victim of mortgage fraud.

The price you pay to purchase your bond will be a small fraction of this amount but the bond amount will directly affect the price you pay.

How Much Does a Montana Mortgage Surety Bond Cost?

All mortgage bonds are credit driven. This means you will receive a customized price quote based on a rate quoted from a surety.

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

Every surety uses the following primary factors to weight risk and determine this rate. And each surety will weigh these factors differently meaning the rate they quote will be drastically different.

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

The quoted rate multiplied by your bond amount is the price you'll pay.

This is where using a specialized surety agency like Surety Bonds Direct can save you hundreds, even thousands of dollars.

Here's how the process works:

• We work with the highest A rated sureties
• We price shop for you and get quotes from all of them
• Deliver the lowest possible rate to you
• And help you purchase your surety bond

We are your personal surety bond shopper and it costs you nothing to have a bond specialist find you the lowest rate. And when you get your pricing, you’re under no obligation to purchase.

Getting your custom pricing is free information you can use to help get through the licensing process with greater ease.

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

Mortgage Broker Bond Price Example

Let's look at the $200,000 bond amount for example pricing.

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

Imagine getting a rate one to two percentage points lower. That's over a thousand dollars you can save and spend on other licensing fees.

Get your hard price quote today. All mortgage surety bond quotes are good for 30 days, giving you plenty of time to plan appropriately.

Remember there is no obligation to purchase when you get pricing.

Go request your price quote today. Remember, this is free information for you.

How to File Your Mortgage Surety 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.

How Long Does a Montana Mortgage Surety Bond Last?

The Montana Division of Banking and Financial Institutions requires an active surety bond on file with the NMLS (National Multi-State Licensing System) to legally conduct business in Montana.

Every mortgage broker, lender, servicer bond has a bond term or 12 months from the effective date.

The effective date is a date you choose when you purchase your bond. This is the "activation" date of your bond.

Some sureties may allow you to purchase your bond with a term lasting multiple years. However, must bonds have a term of 12 months from the effective date. This is when your bond will have to be renewed.

How Do You Renew a Mortgage Broker and Lender 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.

Mortgage Bonds And Getting Your Montana Business License/Registration

The NMLS checklist compiler does a good job in Montana in outlining all of the required licensing steps.

Here is a brief rundown of the important steps that are common for each license classification.

Outline Business Structure

Outline how your business is structured including all business formation documents.

• Unincorporated association
• Corporation
• Limited Liability Company
• Limited Liability Partnership
• General partnership
• Not for Profit Corporation
• Trust

You're allowed to use "doing business as" names and trade names but they must be approved. This typically means being registered with the Montana Secretary of State.

If you're using a trade name you'll need to provide a Certificate of Registration of Assumed Business Name from Montana's Secretary of State for each trade name and DBA you have.

Criminal Background Check

All licenses are required to provide fingerprints for a criminal background check.

Here's who must submit to the background check:

• All owners (direct and indirect), officers, branch managers, etc...
• The qualifying individual

Identify and Sponsor a Qualifying Individual

The qualifying individual is the person responsible for supervising the operations of all physical and remote locations of the business.

• This person must be employed by the business to be considered sponsored.
• They must have at least 3 years of experience as a loan originator from any state or federal registration

The qualifying individual must prove this experience with W-2's or 1099's, though these can be waived if the qualifying individual has been licensed through the NMLS for the 3 year time period.

Management and Organizational Structure

This includes outlining the:

• Registered agent
• Qualifying individual
• Primary contact employees
• Non-primary contact employees
• Control person attestation

These documents must also outline the reporting and internal audit structure.

The organizational chart differs in that it must outline:

• Direct owners include percentage of ownership
• Indirect owners
• Subsidiaries and affiliates of the licensed company

Business Formation Documents

You need to include a copy of all the business formation documents on file with the Montana Secretary of State.

This proves the business is legitimate.

Make sure you check with the NMLS checklist compiler. There are many steps that are unique to each mortgage license classification.