Indiana Mortgage Broker Bond

The Indiana Secretary of State is the authority on mortgage broker licensing and bonds. Mortgage lender licensing is the responsibility of the Indiana Department of Financial Institutions. The licensing and bond requirements for brokers and lenders are established under the Indiana Loan Broker Act and the 2023 Indiana Code Title 24, respectively.

This surety bond is an agreement between three parties: 

• Principal: The mortgage broker or lender that needs to get the bond.
• Obligee: Entity requiring the principal to get bonded.
• Surety: The company that issues the bond.

The purpose of the surety bond is to ensure compensation to those impacted by a mortgage broker’s or lender’s violation of the established regulations. After an individual files a claim against the bond, the surety company will investigate the matter to determine if the claim is valid.

Once confirmed, the surety will pay the claimant, and the principal is required to compensate the surety in full. Avoiding claims against the bond is easily accomplished by following the required regulations, according to our customers.

The cost of an Indiana mortgage broker bond is between $600 and $6,000. The required bond amount for mortgage brokers is $60,000. For mortgage lenders, the bond cost is between $1,000 and $10,000. The required bond amount is $100,000.

The bond premium or total cost is determined by a bond rate that generally ranges from 1% to 10%. This percentage is applied to the required bond amount, and the resulting figure represents the total cost a business or individual must pay to secure the bond.

Use this chart to estimate your bond cost before applying:

Many of our customers ask us about the factors affecting how much a bond costs? In addition to reviewing your credit score, we also take into account your bond history, finances and industry experience.

1. Apply For Your Bond

Obtaining an Indiana mortgage broker bond or lender bond is easy to do with three simple steps. First, choose between two convenient application methods. 

1.  Apply for a bond online – Our customers enjoy the convenience of applying online at any time of day or night. After you apply online, you will get an immediate quote by email. 
2. Call us at (888)-592-6631 – If you have questions before applying or you prefer to apply over the phone, our bond specialists are available to help. 

When applying, you will need:

• Bond name (Loan Broker Bond or Mortgage Lending Surety Bond)
• Bond amount ($60,000 -  $100,000)
• Email and contact information

2. Get a Quote

Soon after you apply by phone or online, we will send you a quick quote via email. Our bond experts will happily review your quote with you upon request.

3. Purchase Your Bond

Spend a few minutes reviewing your invoice and bond documents online, and let us know if you need us to make revisions. After signing the bond documents and making the invoice payment, you will receive your original bond document via email.

When applying for an Indiana mortgage broker license, you must provide an electronic Loan Broker Bond along with other required documentation. For a lender license, a Mortgage Lending Surety Bond is required. The Indiana Secretary of State oversees mortgage broker licensing, while the Indiana Department of Financial Institutions monitors lender licenses. Applications for both licenses, including their bonds, are processed through the NMLS.

These bonds remain in full force until they are canceled. The surety may cancel the bond by providing a 30-day written notice to the obligee and principal.

If you have any questions regarding who needs a bond, the required bond amount, etc., please contact us. 

We recently helped a client secure the required bond for his Indiana mortgage broker license. He was ready to meet the state’s regulatory requirements but needed assistance with the bonding process. Our team guided him in determining the correct bond amount and submitting it through the appropriate channels, ensuring he could move forward with his licensing smoothly and confidently.

To complete the licensing process for Indiana mortgage brokers and lenders, you must provide all required documentation to the Nationwide Mortgage License System. The required items include:

• Application
• Surety bond
• Ultimate equitable owners
• FBI criminal background check
• Individual sponsorship – manager
• Business entity formation documents

Additional information required for lenders:

• Primary contact information
• Approvals and designations
• Bank accounts
• Qualifying individual
• Disclosure questions
• Credit report
• AML/BSA Policy
• Business plan
• Certificates of Authority/Good Standing
• Company Staffing and Internal Policies
• Document samples
• Errors and omissions insurance
• Financial statements
• Management chart
• Organizational chart
• Mortgage servicing agreement
• Warehouse line of credit documentation
• Independent audits
• Third-party authorization
• Legal name/status documentation

Nationwide Mortgage Licensing System. (n.d.). Checklist compiler.
https://mortgage.nationwidelicensingsystem.org/slr/SitePages/Checklist-Compiler.aspx

Indiana Department of Financial Institutions. (n.d.). Home. Indiana Department of Financial Institutions.
https://www.in.gov/dfi/

Indiana Secretary of State. (n.d.). Home. Indiana Secretary of State.
https://www.in.gov/sos/

Indiana Department of Financial Institutions. (n.d.). Mortgage lending electronic surety bond form. Indiana Department of Financial Institutions. https://mortgage.nationwidelicensingsystem.org/slr/StateForms/IN-DFI_MORTGAGE%20LENDING%20%20ESB_Shared_V1.pdf

Indiana Department of Financial Institutions. (n.d.). Loan broker bond. Indiana Department of Financial Institutions.
https://forms.in.gov/Download.aspx?id=7122

Indiana General Assembly. (2023). Title 23, Article 2.5, Chapter 1, Section 14. Indiana Code.
https://iga.in.gov/laws/2023/ic/titles/23#23-2.5-1-14

Justia. (n.d.). Indiana Code Title 24, Article 4.4, Chapter 1, Section 24-4.4-1-202. Justia US Law.
https://law.justia.com/codes/indiana/title-24/article-4-4/chapter-1/section-24-4-4-1-202/