North Carolina Mortgage Broker, Lender or Servicer Bond

Get Your North Carolina Mortgage Broker, Lender or Servicer Bond

Who is Required To Purchase a North Carolina Mortgage Surety Bond?

North Carolina Commissioner licenses:

• Mortgage lenders
• Mortgage brokers
• Exclusive individual mortgage brokers
• Mortgage servicers

All of these license classifications require a mortgage surety bond to have a license issued.

If you're a mortgage lender and you have authorization to conduct reverse mortgages, you have an additional bond required as well.

Why is a North Carolina Mortgage Broker, Lender or Servicer Bond Required?

As you know, the North Carolina Office of the Commissioner of Banks is responsible for the licensing requirements.

These requirements are used to qualify businesses and individuals using a variety of:

• Application fees
• Exam and education fees
• Business structure requirements
• Network and financial requirements

Even with these strict requirements, every year there will be licensed mortgage companies and individuals who commit mortgage fraud to increase profits.

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 mortgage surety bond requirement is the first line of recourse to a customer who falls victim to these or similar actions.

If a customer is financially harmed by a mortgage company or broker, the customer can file a claim against the mortgage bond for financial compensation. The bond amount is the maximum amount available to a customer's claim.

The Commissioner is responsible for setting the required bond amounts.

What Are The North Carolina Mortgage Surety Bond Amounts?

All mortgage surety bond requirements are based on the total dollar amount of mortgages funded or sold in the previous 12 month period ending December 31st.

Mortgage Lender Company and Servicer Companies

Both lenders and servicers have the same bond amount requirements. The only difference is the dollar figures for lenders is based on mortgages written and for servicers its based on the dollar amount of their unpaid mortgage portfolio.

Mortgage Broker Company and Exclusive Mortgage Broker

Mortgage broker companies share bond amounts with exclusive mortgage brokers.

An exclusive mortgage broker is an individual who works exclusively as a broker for a single lender or broker. This is not a common license.

Reverse Mortgage Lender

If you're getting licensed as a mortgage lender and you want to provide reverse mortgages, you must purchase an additional surety bond in the amount of $100,000.

Similar to the mortgage surety bond for getting licensed, this bond requirement ensures you'll provide the appropriate funds to the borrower during the course of their mortgage term.

How Much Does a North Carolina Mortgage Surety Bond Cost?

All mortgage bonds in North Carolina are credit driven bonds. This means you'll get a custom price based on these primary factors:

• 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

This rate is determined by a surety. A surety is an insurance company that underwrites mortgage bonds.

Every surety is different and uses their own internal rules to assess an applicant on these factors. From their assessment, they will quote a rate.

This is one payment for the entire bond term (typically 12 months).

The rates sureties quote can be vastly different. And this is where Surety Bonds Direct can save you hundreds, even thousands of dollars on your mortgage bond.

We work with multiple A-rated sureties to price shop for you and find the lowest possible price so you can purchase your surety bond and save money.

We have seen rates vary by one to two percentage points.

Mortgage Surety Bond Example Pricing

Let's look at the $150,000 bond amount for example pricing.

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

You can see the pricing changes drastically as the rate increases.

It costs you nothing to have us find you the lowest price and once you get your pricing, you're under no obligation to purchase. Obtaining pricing is free information.

There's no reason to 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.

How Long Does a North Carolina Mortgage Lender and/or Broker Bond Last?

The Commissioner of Banking requires an active surety bond on file with the NMLS (National Multi-State Licensing System) to legally conduct business in North Carolina.

Every mortgage broker and lender 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.

12 months from this date, 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 Broker, Lender or Servicer Bonds And Getting Your North Carolina Business License/Registration

The entire process is detailed step by step in the NMLS Checklist Compiler.

Here's a brief breakdown of each step.

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)

The financial statements must prove a company net worth of $25,000 and at least $10,000 in liquid cash.

These thresholds must be maintained on a continual basis and they are reviewed every year during the license renewal process.

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.

Control Person

This is the individual who has the power to direct the management or policies of the company, whether through ownership of securities, by contract, or otherwise.

This would include a:

• Director, general partner, or executive officer
• Person with voting power or selling power of over 10% of company stock
• Managing member
• Partner who has contributed at least 10% of company capital.

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: Provide Lease/Deed Agreement

You need to provide proof of a lease agreement or deed showing the primary building you're conducting business out of.

This must also describe the premises and must be signed by the company official and landlord if leased.

This location must be the primary location where you keep your books and records for the business operations.

Step 6: Provide Vendor Agreements

If you use any of the following or similar, you must include the agreements you've made with these vendors.

• Marketing company
• Lead generator
• Third party processor or underwriting company

Step 7: 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.