Massachusetts Mortgage Broker Bond

The Massachusetts Division of Banks is tasked with overseeing mortgage broker and lender licensing compliance, as outlined in Massachusetts General Court Part III, Title IV, Chapter 255E. Licensing requirements for loan originators are set by  General Laws chapter 255F, section 12. The state requires mortgage brokers, lenders and loan originators to have an active surety bond.

This surety bond is an agreement between three parties: 

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

The surety bond ensures that someone negatively affected by a broker’s or lender’s violations of established regulations can be fairly compensated. The surety is responsible for investigating all claims and compensating the claimant accordingly. The principal is required to reimburse the surety for the amount paid.

Avoiding claims against the bond is financially beneficial, which can be achieved by adhering to the state’s regulations.

The cost of a Massachusetts mortgage broker bond is between $750 and $7,500. The required bond amount is $75,000. For mortgage lenders, the bond cost is between $1,000 and $10,000. The required bond amount is determined by the total loan amount processed in the previous year, ranging from $100,000 to $500,000. Loan originators will pay between $250 and $2,500 for the required $25,000 bond.

Often, our customers ask about the factors that impact how much a bond costs. Consideration is given to the applicant’s finances, credit scores, bond history and industry experience.

1. Apply For Your Bond

The process for obtaining a Massachusetts mortgage broker bond or lender bond has three easy steps. The first step is to decide how you will apply for your bond. We offer two convenient options.

1.  Apply for a bond online – The online application is available 24/7 for your convenience. Our customers usually can complete the short form in a couple of minutes. 
2. Call us at (888)-592-6631 – Our bond experts can answer any questions that you have before applying, and we are available to take your application by phone. 

When applying, you will need:

• Bond name (Mortgage Broker Bond or Mortgage Lender Bond)
• Bond amount ($25,000, $75,000, $100,000, $250,000, $500,000)
• Email and contact information

2. Get a Quote

We provide instant bond quotes via email to our valued customers. Spend a few minutes reviewing your quote. Our bond experts are happy to go over the quote with you upon request. Please let us know if you discover any errors that need to be adjusted.

3. Purchase Your Bond

The paperwork is available online for your convenience. After signing the documents and paying the invoice, you will receive the original bond via email.

When applying for a Massachusetts mortgage broker license or a lender license, an electronic surety bond must be submitted through the NMLS. The Massachusetts Division of Banks enforces the requirements for a mortgage broker license and a lender license, including the Massachusetts Mortgage Broker Bond and the Massachusetts Mortgage Lender Bond. 

A $75,000 bond is required for a mortgage broker license, a $25,000 bond for loan originators, and a bond ranging from $100,000 to $500,000 for mortgage lenders, based on the annual dollar amount of closed residential loans in Massachusetts:

The bonds run continuously until they are canceled by the surety. The surety must provide the principal and obligee with a 30-day written cancellation notice.

If you have any questions regarding the definition and role of mortgage brokers and lenders in Massachusetts, the required bond amount, etc., please contact us. 

A new customer called us recently for clarification of the mortgage broker bond requirements in Massachusetts. After we answered all of her questions in detail, she was confident in submitting her application online. She was appreciative of the personalized attention we provided as she set up her new bond.

The licensing process for Massachusetts mortgage brokers and lenders is completed via the Nationwide Mortgage License System. To apply for a license, you must submit the following items:

• Application
• Surety bond
• Registered agent
• Financial statements 
• Credit report
• FBI criminal background check
• Bank account
• Business plan
• Contact employees
• Approvals and designation
• Qualifying individual
• Control person attestation
• AML/BSA policy
• Certificate of Authority/Good Standing
• Verification of experience
• Business plan
• Management chart
• Organizational chart
• Formation documents
• Form W-9
• EIN

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

Massachusetts Division of Banks. (n.d.). Division of Banks. Retrieved December 19, 2024, from https://www.mass.gov/orgs/division-of-banks

Massachusetts General Court. (n.d.). Chapter 255E: Licensing of mortgage lenders and mortgage brokers. Retrieved December 19, 2024, from https://malegislature.gov/Laws/GeneralLaws/PartIII/TitleIV/Chapter255e

Massachusetts Division of Banks. (n.d.). Mortgage broker license electronic surety bond form. Retrieved December 19, 2024, from https://mortgage.nationwidelicensingsystem.org/slr/StateForms/MA_Mortgage%20Broker%20License%20ESB_V1.pdf

Massachusetts General Court. (n.d.). Chapter 255F, Section 12: Loan originators; licensing requirements. Massachusetts Legislature. https://malegislature.gov/Laws/GeneralLaws/PartIII/TitleIV/Chapter255f/Section12

Nationwide Mortgage Licensing System. (n.d.). Massachusetts mortgage broker license electronic surety bond form. https://mortgage.nationwidelicensingsystem.org/slr/StateForms/MA_Mortgage%20Broker%20License%20ESB_V1.pdf

Nationwide Mortgage Licensing System. (n.d.). Massachusetts mortgage lender license electronic surety bond form. https://mortgage.nationwidelicensingsystem.org/slr/StateForms/MA_Mortgage%20Lender%20License%20ESB_V1.pdf