North Dakota Residential Mortgage Lender Bond

The North Dakota Department of Financial Institutions is tasked with mortgage lender and loan servicer licensing and compliance. The requirements for licensing are established in North Dakota Century Code Chapter 13. Applicants must submit a surety bond when applying for a licensing. 

This surety bond is an agreement between three parties: 

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

The purpose of a surety bond is to ensure that someone who has been impacted by the unethical or fraudulent acts of a licensee can be fairly compensated. The surety is responsible for investigating all claims. For a validated claim, the surety compensates the claimant accordingly. 

After a claim is paid, the principal is responsible for reimbursing the surety for the full amount paid on the claim. Because the financial effect of a valid claim is significant, avoiding claims against the bond is in your best interest.

The cost of a North Dakota mortgage lender bond is between $500 and $5,000. The state requires mortgage lenders to hold a $50,000 surety bond. Companies that are considered to be a large servicer, as defined under North Dakota Century Code Chapter 13, a tangible net worth requirement stands. A $1 million surety bond may be submitted in lieu of the net worth requirement. The cost of the bond is between $10,000 and $100,000.

The bond rate will be between 1% and 10%. This is also commonly called the bond premium or the cost of the bond. The chart below provides you with an easy way to estimate your bond cost before applying. 

Are you wondering how we determine how much a bond costs? We review factors like the applicant’s finances, credit scores, bond history and industry experience. 

1. Apply For Your Bond

Obtaining a North Dakota mortgage lender or loan servicer bond is a fast process. First, apply for your bond using one of our two convenient methods.

1. Apply for a bond online – Take advantage of our online bond application to apply at any hour of the day. This is a brief form that our customers often complete in a matter of minutes.  
2. Call us at (888) 592-6631 – As an alternative, contact us by phone for personalized assistance with your application.

When applying, you will need:

• Bond name (Residential Mortgage Lender Bond or Residential Loan Servicer Bond) 
• Bond amount ($50,000 or $1,000,000)
• Email and contact information

2. Get a Quote

After submitting your bond application, you will quickly receive an emailed quote from us. We can review the quote with you upon request. For revisions or other assistance, please get in touch with us.

3. Purchase Your Bond

The last step is to access your documents online. Simply sign the documents and make the invoice payment, and we will send the original bond to you via email.

To apply for a Maine mortgage lender license or a loan servicer license, you must submit an electronic surety bond with your NMLS application. The North Dakota Department of Financial Institutions (DFI) oversees licensing compliance for mortgage lenders and loan servicers.

If you hold an active North Dakota Money Broker license, you may request a transition to the new Residential Mortgage Lender license through NMLS.

The DFI requires applicants to submit the appropriate bond form—the Residential Mortgage Lender Bond for any company that is attempting to originate or broker Residential Mortgage loans in North Dakota or a Residential Loan Servicer Bond for companies engaged in servicing residential mortgage loans, which must remain active to maintain licensure.

If you have any questions regarding the required bond amount, the definition and role of mortgage lenders and loan servicers in North Dakota, etc., please contact us.

A new customer contacted us when he was uncertain about the loan servicer bond requirement. With more information about the bond requirement, he was able to apply for his new bond with confidence. 

The licensing process for a North Dakota mortgage lender is completed through the Nationwide Mortgage License System. The following items must be submitted when applying for a license:

• Application
• Surety bond
• Financial statements
• Resident/registered agent
• Contact employees
• Qualifying individual
• Credit report
• FBI criminal background check
• Direct owner/executive officers
• Indirect owners
• IT/cybersecurity policy
• Business plan
• Certificate of Authority/Good Standing Certificate
• Document samples
• Formation documents
• Management chart
• Organizational chart
• Warehouse line of credit documentation

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

North Dakota Department of Financial Institutions. (n.d.). Home [Website].
https://www.nd.gov/dfi/

Casetext. (n.d.). North Dakota Century Code §13-12-05: Application for residential mortgage lender license.
https://casetext.com/statute/north-dakota-century-code/title-13-debtor-and-creditor-relationship/chapter-13-12-residential-mortgage-lenders/section-13-12-05-application-for-residential-mortgage-lender-license