Mortgage lenders and servicers in the State of Montana are affected by a new law that was recently enacted named the Montana Mortgage Act. The new law will be in effect on October 1, 2011 and now requires Montana services to acquire a $100,000 surety bond. The law also removes the option which allowed mortgage professionals to meet a specific net worth requirement in place of obtaining a bond.
The Montana Mortgage Act states:
“An entity licensed as a mortgage broker, or mortgage lender, and mortgage servicer is required to maintain one surety bond for each entity license.”
Montana mortgage lenders and originators who operate within the state were already required to post surety bonds in order to operate legally.
When the foreclosure fiasco happened in 2009, states legislatures began to take a second look at mortgage servicers and how they were being managed and regulated. Having the $100,000 surety bond in place helps guarantee that Montana mortgage servicers will honor the rules set by their state.