South Dakota Mortgage Broker Bond

The South Dakota Division of Banking is the authority on mortgage broker and lender bonds. The requirement for professional licensing is established under South Dakota Codified Laws § 54-14-13.

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 and backs it financially (Ex. JW Surety Bonds).

The surety bond ensures that those impacted by a mortgage broker’s or lender’s violation of established regulations are justly compensated. The principal is required to reimburse the surety for any amount paid out on a claim. Avoiding claims against the bond is easily accomplished by following the required regulations.

The cost of a South Dakota mortgage broker bond or lender bond is between $500 and $5,000. The bond amount required for both mortgage brokers and lenders is based on loan volume, and it ranges between $25,000 and $50,000.

The cost of the bond is usually between 1% and 10% of the bond amount. This may also be referred to as the bond premium you’ll have to pay. Use this chart to estimate your bond cost before applying.

Our customers often ask which factors affect how much a bond costs? The factors that impact the cost of the bond are the applicant’s finances, bond history and industry experience. 

1. Apply For Your Bond

The process for obtaining a South Dakota mortgage broker or lender bond involves three easy steps. First, apply for your bond using your choice of application methods.

1. Apply for a bond online – Our application is available online 24/7, and it only requires a few minutes of your time. 
2. Call us at (888)-592-6631 – Our friendly bond experts are available to take your application over the phone and answer your questions.

When applying, you will need:

• Bond name (Mortgage Company Bond)
• Bond amount ($25,000 - $50,000)
• Email and contact information

2. Get a Quote

Our customers appreciate receiving a fast bond quote in their inboxes. Our bond specialists are available to review your quote and answer any questions you have. 

3. Purchase Your Bond

The bond documents and invoice are available online for your convenience. Please let us know if you spot an error before signing the documents. After paying the invoice and signing the documents, you will receive the original bond via email.

When applying for a South Dakota mortgage broker license, an electronic surety bond must be submitted through the NMLS. The South Dakota Division of Banking oversees the licensing process for mortgage brokers and lenders, requiring them to secure a Mortgage Company Bond as part of the license application.

This bond is continuous and remains active until the surety provides a written cancellation notice to the principal and obligee.

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

Recently, we had the privilege of assisting a client in obtaining his South Dakota mortgage broker license, allowing him to start his business in the state. From the beginning, he was committed to meeting all regulatory requirements but needed guidance on the licensing and bonding process. We collaborated with him to ensure he understood the essential steps, including securing the proper bond amount and submitting it through the correct channels.

To complete the licensing process for South Dakota mortgage brokers and lenders, the required application documentation must be submitted to the Nationwide Mortgage License System. The required items include:

• Application
• Surety bond
• Approvals and Designation
• Credit report
• FBI criminal background check
• AML/BSA Policy
• Business Plan
• Certificate of Authority/Good Standing
• Company staffing and internal policies
• Formation documents
• Management chart
• Organizational chart
• Verification of experience
• Mortgage servicing agreement, for lenders

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

South Dakota Division of Banking. (n.d.). Banks. South Dakota Department of Labor and Regulation.
https://dlr.sd.gov/banking/banks/default.aspx

South Dakota Legislature. (n.d.). South Dakota Codified Laws § 54-14-13. South Dakota Legislature.
https://sdlegislature.gov/Statutes/54-14-13

South Dakota Division of Banking. (n.d.). Surety bond form. South Dakota Division of Banking.
https://mortgage.nationwidelicensingsystem.org/slr/StateForms/SD1-Surety-Bond.pdf