Minnesota Mortgage Broker Bonds Explained
In order to become an MN mortgage broker, you have to pass a licensing procedure. It ensures you fit the state requirements for this profession. The process entails that you obtain a mortgage broker bond.
The goal of the bond requirement is to provide an extra level of security for the state and its citizens. It guarantees you will follow applicable laws in your activities as a broker.
In essence, the mortgage broker bond works as a three-party contract. The principal that needs bonding is your business. The obligee is the Minnesota Department of Commerce, which requires it. The third party is the surety that backs you by getting you bonded.
Questions about Mortgage Broker Bonds in Minnesota
Who needs to get this bond?
If you want to obtain a Minnesota mortgage broker license, also known as a residential mortgage originator license, you have to get a surety bond. The bonding amount is between $100,000 and $200,000. It ensures your compliance with Chapter 58 of the Minnesota Statutes.
You have to provide your full licensing paperwork via the Nationwide Multistate Licensing System & Registry (NMLS). The state authority is the Minnesota Department of Commerce.
What are the bonding costs?
The required bond amount for Minnesota mortgage brokers is between $100,000 and $200,000. It depends on your volume of closed loans in the previous year. The initial amount for licensing is $100,000.
In order to get bonded, you have to pay a fraction of the required amount, which is your bond premium. It is set on the basis of your financial strength.
When you apply with a surety, it has to examine your personal credit score, company finances, and fixed and liquid assets that you showcase. By doing this, it can assess your surety bond cost on the basis of the perceived risk. The lower it is, the better premium you can expect.
|Minnesota Mortgage Broker Bond Cost Based on Credit Score|
|Yearly loan volume||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Initial licensing; volume below $5 million||$100,000||$500-$1,250||$750-$1,500||$2,000-$5,000||$5,000-$10,000|
|Between $5 million and $10 million||$125,000||$625-$1562.5||$937.5-$1875||$2,500-$6,250||$6,250-$12,500|
|Between $10 million and $25 million||$150,000||$750-$1,875||$1,125-$2,250||$3,000-$7,500||$7,500-$15,000|
|Above $25 million||$200,000||$1,000-$2,500||$1,500-$3,000||$4,000-$10,000||$10,000-$20,000|
Can I get bonded with bad credit?
Lance Surety Bonds offers a bonding option for applicants with low credit scores, tax liens, bankruptcies, and civil judgments. If you're facing such financial issues, you can use our Bad Credit Surety Bonds program.
You can expect rates between 5% to 10% due to the higher bonding risk. Nevertheless, as we work with a long list of A-rated, T-listed surety companies, we can still obtain for you a top bonding option.
How do I apply?
You can start your bonding by completing our online application form (it takes 5min). Then you need to attach all necessary paperwork to receive an exact quote from us. If you're satisfied with it, you can buy the bond online straight away.
Do you want to know more about the way bonding functions? You can obtain in-depth information on our extensive How to Get Bonded page.
For further queries, we are here to assist you. Just call us at (877) 514-5146.
What happens if I receive a claim?
The purpose of the surety bond that you obtain when getting your mortgage broker license is to safeguard the interests of your customers. If you fail to follow the law and a party suffers any damages as a result, they can demand compensation via a bond claim.
The sum that claimants can seek is up to the bond amount you have posted. If the case is proven, you are liable to cover these costs. Your surety may pay them at first, but you have to fully reimburse it. Thus, claims can lead to serious financial harm for your business, so it is a wise idea to avoid them.
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What Our Clients Have To Say?
Kimberlee AblesQuick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Andrew PoincotLong story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
Margie MartinezWe decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!