Oregon Mortgage Broker/Lender and Loan Servicer Bonds

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Who Is Required To Purchase an Oregon Mortgage Surety Bond?

The Division of Financial Regulation has the following three mortgage license classifications:

• Individual mortgage loan originator license
• Company mortgage lender license
• Company mortgage servicer license

Each license classification is required to purchase a surety bond to complete the licensing process.

If you're obtaining an individual mortgage originator license and you'll be employed by a company that is bonded, you do not need to purchase a surety bond. You will be covered by the company's 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. Lenders can employ loan originators.

 

Mortgage Servicer

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

 

Loan Originator

This is an individual who finds and works with customers to match them up with the appropriate loan for their property goals and financial needs.

 

Why is an Oregon Mortgage Bond Required?

The Oregon Division of Financial Regulation requires all mortgage professionals to be licensed to legally provide services in the state.

The licensing process qualifies individuals and businesses with a series of requirements such as:

• 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

More details are described below.

Despite companies going through tis process and paying all the required fees, every year there is a small number that will commit mortgage fraud to increase profits or steal 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 only way the Division can hold licensed mortgage professionals accountable to the promises they make is through this surety bond requirement.

If a customer is financially harmed by an individual or company, the customer can make a claim against the surety bond for compensation for the damages. However, the total for an single claim or the sum or all individual claims can only go as high as the required surety bond amount.

 

What Are The Oregon Mortgage Surety Bond Amounts?

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

The required bond amount is based on the current loan volume process from the previous 12 months with a minimum if you're just starting your business.

The bond amounts are uniform across all license classifications. Remember if you're an individual loan originator you only need to be bonded if you work independently.

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 to purchase your bond will be a small fraction of the amount, similar to purchasing a traditional insurance policy.

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.

 

How Much Does an Oregon Mortgage Surety Bond Cost?

Because of the risk in the industry, all mortgage surety bonds are credit driven bonds.

When you have to purchase a surety bond, you use a specialized surety agency, like Surety Bonds Direct. It's our job to help you find the lowest possible price for your bond, which can end up saving your thousands of dollars.

This is how the process works.

 

Step 1: Have Us Price Shop For You

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

Every surety uses the following primary factors to determine a rate (price) for your bond:

• 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

There is no way around having the owners personal credit be the primary factor, but this is how we can save you a lot of money.

We work with the top A-rated sureties to price shop for you.

This process typically only takes a few hours, but always less than a business day.

Step 2: Have Your Bond Delivered

Once you agree to purchase your bond and complete your payment, our issuance department will prepare your bond with the:

• Correct bond form from the Division
• Correct seals and signatures
• Power of attorney

We will even electronically file the bond with the NMLS for you. All you have to do is follow our instruction manual to grant us access. The process takes less than one minute to complete.

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

 

Oregon Mortgage Surety Bond Price Example

Let's look at the $100,000 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 specific price quote today. All quotes remain unchanged for 30 days. After 30 days you will have to have your bond re-quoted.

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 Long Does an Oregon Mortgage Surety Bond Last?

The Division will conduct an internal assessment of your bond amount and every September, they will send an email with your new bond amount if it needs to be updated.

If you need a higher (or lower) bond amount, we will be able to get you through the process a lot faster.

Keep in mind, as long as you and/or your company remain in business, you must have an active surety bond on file with the NMLS.

 

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, In Oregon there is a renewal period between November and December with December 31st being the last day to renew your license and update your bond.

This is another great reason to work with us. You get assigned your own bond specialist to manage your bond for you.

As the end of the year approaches, you will receive a call from your bond specialist to remind you about your surety bond.

Along with the letter from the Division about your updated bond amount, you will either renew your current bond or get a new one for the updated amount.

If you renew your bond, once you pay the renewal premium, you're done.

If you have to get a new updated bond, we will e-file your bond for you just like we did when you initially purchased.

 

Mortgage Bonds And Getting Your Oregon Business License/Registration

The NMLS checklist compiler does a good job in Oregon 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 and Plan

Include your business structure and formation documents that are filed with the Secretary of State.

And all trade names must be officially registered and included when you provide all of your business information.

This also includes your Certificate of Authority if you're an out of state company or your Good Standing Certificate if you're an instate company.

You also need to write up your business plan which will outline:

• Marketing strategy
• Products
• Target markets
• Operating structure

 

Criminal Background Check

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

Each individual employed by the mortgage company needs to go through a background check.

 

Identify a Qualifying Individual and Registered Agent

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 registered agent must be on file with the Secretary of State.

 

Management and Organizational Structure

You must include a management chart showing the:

• Divisions of the company
• Officers
• Managers

You only need to provide an organizational chart if the business getting licensed is owned by another entity, business or person, and/or if there are subsidiaries or affiliated businesses.

 

Business Financial Statements

You must provide a CPA created:

• Balance sheet
• Income statement
• Cash flow statement
• Additional information related to these financial documents

If you're a start-up company you'll only need an initial State of Condition rather than the above.

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