Ohio Mortgage Broker, Lender, or Loan Originator Bond

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Who is Required To Purchase an Ohio Mortgage Broker Bond?

The Ohio Department of Commerce has licensing requirements for:

• Individual mortgage loan originators
• Residential mortgage companies
• Credit unions and depository institutions who originate or service mortgages

Credit Unions and depository institutions can file for an exempt status so they don't have to obtain a mortgage license. However, they are still subject to the surety bond requirements.

Individual mortgage originators are required to have an active surety bond on file with the NMLS, unless they're covered by an employer's mortgage surety bond.

All of the bond amounts for each of these scenarios are outlined below.

 

Why is an Ohio Mortgage Broker, Lender, or Loan Originator Bond Required?

The Ohio Department of Commerce is responsible for the licensing requirements for mortgage and most financial lending businesses.

The licensing requirements are put in place to help the government identify the businesses that can service the public and bring value to their communities.

And even with all the licensing requirements businesses must satisfy each year, there will sill be a small number of mortgage companies who financially harm their customers on purpose to make more money.

Examples of fraudulent mortgage 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 purchase a high commission loan to make more money
• Creating fabricated fees and higher fee structures

It's the mortgage surety bond that is put in place as the primary tool to hold mortgage companies accountable to these actions.

If a customer is harmed by a company or individual, they can make a claim against the surety bond for financial compensation, but only up to the bond amount.

 

What Are The Ohio Mortgage Broker Bond Amounts?

The bond amount required by the Department of Commerce is 0.5% of the total amount of recorded on the Bond Declaration unless you require the maximum bond amount of $150,000.

The Bond Declaration is a form required to officially record the loan amount of loan originations during the previous 12 month period.

This is the figure used to determine your bond amount.

However, the National Multi-State Licensing System (NMLS) has buckets to help determine your bond amount coverage.

As you can see if you're a brand new company or individual getting started, you're minimum bond amount is $50,000.

 

Additional Office Locations

If you're a company with any additional office locations (or branches) there is an additional surety bond amount of $10,000 on an additional per location or branch basis.

This does not include your primary location.

Remember, this bond amount is the financial coverage you're purchasing as a licensed professional for the protection of your customers.

 

How Much Does an Ohio Mortgage Broker Bond Cost?

Ohio mortgage surety bonds are credit driven bonds.

This means you'll have to get a customized price based on a rate from a surety. A surety is the insurance company that underwrites this type of bond.

To quote a rate, the surety will primarily consider these 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

The rate quoted by a surety will be different from any other surety. We've seen rates for the same applicant come back one to two percentage points different.

And this is where you can save hundreds, even thousands of dollars when you purchase your bond.

 

How To Save Hundreds - Even Thousands - Of Dollars Purchasing Your Bond

At Surety Bonds Direct, we are a specialized surety agency. We work with the top A-rated sureties to find our customers the lower possible rate and price for their bond.

It's out job to:

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

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.

 

Ohio Mortgage Broker Bond Price Example

Let's look at the $100,000 bond amount to keep the math simple. Pay attention to the rates and how one to two percentage point can make huge difference in the price, saving you a lot of money.

As you can see these price differences can be substantial, enough to help you pay the majority if not all of your licensing fees.

When you purchase your bond, it's one payment for the term of your bond, in this case 12 months.

 

Get Your Exact Mortgage Surety Bonds Price Today

Remember, there is no cost to have a bond specialist find you pricing. 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?

Once you agree to a price, purchasing your bond only requires completing an online checkout form.

After 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 for you. The process takes only a few minutes.

 

How Long Does an Ohio State Mortgage Broker Bond Last?

Your bond has a term that is equal to the term of your registration.

Your bond itself has an active term that is 12 months from an effective date you choose when you purchase your bond.

This is another great reason to work with a surety agency like Surety Bonds Direct. You get assigned your own bond specialist to manage your bond.

As your bond expiration approaches, your bond specialist will call and email you 30 to 40 days in advance to remind you about your bond expiring. They will have renewal pricing ready and help you make any adjustments if you need to increase your bond amount.

Renewing your bond requires paying the renewal premium. Once you pay, the original bond you filed with your application will remain active.

 

Mortgage Broker, Lender, or Loan Originator Bonds And Getting Your Ohio Business License/Registration

Your best resource for a detailed outline of the licensing steps is the NMLS checklist compiler.

Here are some of the high level steps to get your license.

 

Financial Statement

If you're a new company you'll only have to provide an initial statement of condition.

If you're a company with any history, you'll need to provide a full financial statement.

 

Business Registration and Trade Names

You'll need to include all of your company's formation documents filed with the Ohio Secretary of State.

If you plan on using one or more trade names, you'll have to upload the registration form for each trade name.

 

Designate Your Qualifying Individual/Operations Manager

This person must be a licensed mortgage originator and listed as the qualifying individual.

They must have a least 3 years of experience in the residential mortgage and lending field including actual experience as an originator.

 

Surety Bond Declaration

This is unique to Ohio. If you're required to have a bond amount under the maximum of $150,000, you must fill out a surety bond declaration form.

This states the total amount of mortgage loans originated proving the correct bond amount it purchased.

 

Business Plan

You need to provide a full business plan including the:

• Mortgage activity you will partake in
• Marketing strategies you'll use
• The products you'll offer to your customers
• The target markets you plan on going after
• The fee schedules you'll use for your services
• Plus the process a customer will go through when applying for a mortgage

 

Documents Samples

For all license types you'll need to show samples including:

• The anti virus software you'll use on a document called Computer System
• The days and business hours

For lenders:

• Samples of loan contracts
• Methods for compliance
• Samples of each loan product you plan on offering
• Interest calculation or payment structure forms

For brokers:

• Mortgage broker contract agreement
• Copies of all documents listed on the Office of the Ohio Attorney General

For servicers:

• Sample payment history documents
• Written Mortgage Servicing Agreement Contract

 

Organizational and Management Chart

You must outline the organization including the:

• All direct owners or 5% or more
• Indirect owners that own or control over 5%
• All individuals listed as direct owners and executive officers must match the management chart

A management chart including the:

• Directors
• Officers
• Managers

There are further requirements so make sure you go through the NMLS checklist compiler one step at a time.