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Mortgage Broker Bond Guide

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Mortgage Broker Bonds Process

#1: Determine Your Requirements

Find out your bond requirements by selecting your state from the map below. Some states require separate mortgage broker bonds for branch locations and each loan originator. Also, if you want to operate in several states, you’ll have to obtain a mortgage broker bond in each state that requires them. If you need assistance determining which bond you need, it is best to contact a bond professional. In addition to getting a mortgage broker bond, most states will require mortgage brokers to pass a written qualified test, complete pre-licensure education courses and obtain Errors and Omissions (E&O) Insurance.

Make sure you visit the Nationwide Mortgage Licensing System & Registry (NMLS) website to find out what pre-licensure education requirements you need to meet, view the approved course provider list and see the pre-licensure education FAQ’s.

#2: Get Approved for Your Bond

Once you determine the bond requirements you must meet, your next step is to apply for your mortgage broker bond and get instantly approved.

#3: Sign and Submit Your Bond to the State

After you receive your surety bond, you must:

  • Sign your bond
  • Make a copy for your records
  • Send the signed bond to the state (along with any other important paperwork provided by the state or bond agency)

Once you send your signed bond to the state, they will send you your mortgage broker license. This process can take anywhere from one to three weeks depending on the state and its workload.

What Do Mortgage Broker Surety Bonds Cost?

Costs are a percentage of the bond amount required of you, which is based on personal credit. Read our guide to learn more about how your bond costs are determined, or use our bond premium calculator tool to get an instant estimate. Our company can get you bonded nationwide, as we can approve you for the larger bond limits needed to do so. Also, if you currently have bonds with collateral requirements, we can likely help you get them approved without it to free up your funds.

Why Do You Need a Mortgage Broker Surety Bond?

You need a bond to protect your clients. If you break the rules of your bond, your clients can make claims against it which you’re responsible to pay. For example, if you approve a client for a loan you know they cannot repay, a claim can be filed. Depending on the state’s requirements, loan originators may also need to obtain an individual mortgage loan originator surety bond in addition to the mortgage broker bond their company holds.

Bond Claims Can Put Your Assets at Risk

You’re responsible to pay bond claims in full which can be as large as the full bond amount (including legal costs). The indemnity agreement you must sign to obtain your mortgage broker bond is a legal contract that pledges your corporate and personal assets in the event of bond claims. Watch our video for an explanation of how bond claims work. Unfortunately, most bond agencies won’t take the time to explain how claims can put you at risk and how to avoid them; if this happens when working with a bond agent it should be a big red flag to re-evaluate doing business with them.

Save Money on Bond Claims

Your bond agent should be your first line of defense against bond claims. In order to avoid bond claims, ensure you conduct your business professionally and ethically, while following the rules of your bond. Remember, you’re responsible to pay for bond claims that you cause. Learn how our company can save you money on claims. If you need help understanding exactly what your bond guarantees you will and will not do, please contact a bond professional.

Getting Mortgage Broker Bonds with Bad Credit

You can obtain mortgage broker bonds with credit issues. However, not all bond agencies will be able to approve you. Your personal credit is the primary item that is considered when you apply for your bond, as it’s used to get an idea of your probability of causing claims and your ability to pay them. Things like unpaid collections or tax liens on your credit report are a negative reflection of how you handle your finances, and can result in getting declined for a bond if you work with the wrong bond agency. Unfortunately, even if you get approved for your mortgage broker bond with credit issues, your costs will likely be higher. Use our free bond premium estimate tool to get an instant ball park estimate.

How Mortgage Broker Bonds Benefit You (and your clients)

Your bond protects your clients. If you break the law or any other rules while operating as a mortgage brokerage, your clients can file claims on your bond. However, your bond benefits you as well, as the surety bond alternatives have several disadvantages.


Frequent Questions

What does a mortgage broker bond cost?

Costs are a percentage of the bond amount that’s required of you, which is based on your personal credit. Use our bond pricing tool to get an instant quote.

Is there a blanket bond that will cover me nationwide?

No. You will need a bond for each state you are operating in that has a bond requirement. Some states require a bond for each branch location and or loan originator.

How do I get licensed in all 50 states?

Getting licensed in all 50 states can be problematic if you work with the wrong surety agent. Mortgage broker bonds are not insurance for the broker, they are a form of credit. Many mortgage brokers reach their surety credit limitations before being able to get licensed in all 50 states.

Can I get a mortgage originator surety bond with bad credit?

Yes. Although it will raise the price for the bond significantly.

How much time does a mortgage broker bond application take?

Our online application will provide you with an instant quote online.

How does this differ from mortgage broker professional liability insurance?

Professional liability insurance protects the broker in the event of a claim. Mortgage broker bonds provide protection for the public, not the broker. In the event of a claim on the bond, the bonding company will look to the broker for reimbursement. Therefore, mortgage brokers bonds are truly a form of credit to the broker and insurance to the public.

Is this the same as a mortgage bond?

No. Some mistakenly refer to these bonds as "mortgage bonds", but that is a different product. These bonds are a type of surety bond in place to guarantee the broker's license. Mortgage bonds are investment bonds backed by real estate or physical property, such as equipment. The mortgage bond market provides investors protection in the event of a default. Also, the term “mortgage surety bond” is sometimes used, which is an inaccurate term for a mortgage broker or lender bond.


Select Your State to Find a Surety Bond
There are many of different requirements for surety bonding across the U.S., and our company handles all of them. Bond requirements vary drastically by state.

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Jennifer Henson
Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
David Tillotson
Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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