New Mexico Mortgage Broker Bonds Explained
Mortgage brokers in New Mexico have to obtain a state license before engaging in mortgage activities. One of the main licensing criterion that you have to fulfill is to post a mortgage broker bond.
The bond that you obtain serves as a safety mechanism that protects the interests of your customers. It ensures that you will follow applicable rules and regulations.
Your New Mexico bond works as a three-party contractual agreement with your business as the principal. The New Mexico Regulation and Licensing Department is the obligee that requires bonding. The surety is the provider of the needed bond.
Questions about Mortgage Broker Bonds in New Mexico
Who needs to get this bond?
If you want to obtain a New Mexico mortgage broker license, you need to provide a surety bond between $50,000 and $150,000. The Nationwide Multistate Licensing System & Registry (NMLS) handles the actual process. However, the licensing body is the New Mexico Regulation and Licensing Department's Financial Institutions Division. The bonding provides additional security that you will comply with the state Mortgage Loan Company Act, and other relevant laws.
What is the New Mexico mortgage broker bond cost?
The bond amount for mortgage brokers in New Mexico is set between $50,000 and $150,000, depending on the volume of annual mortgage loans.
$50,000 - mortgage loan volume below $3 million
$100,000 - between $3 million and $10 million
$150,000 - above $10 million
The bond premium that you have to pay to get bonded is only a small percentage of the required amount. If your finances are in good shape, the rates are usually between 1% and 5%.
How is your surety bond cost set? It is based on careful consideration of your personal credit score, business finances, and assets and liquidity. By examining these indicators, your surety assesses the strength of your profile and the bonding risk involved. The better your finances are, the smaller your bond price would be.
|New Mexico Mortgage Broker Bond Cost Based on Credit Score|
|Mortgage broker bonds based on yearly business volume||Bond amount||Credit Score|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Volume below $3 million||$50,000||$250-$625||$375-$750||$1,000-$2,500||$2,500-$5,000|
|Between $3 million and $10 million||$100,000||$500-$1,250||$750-$1,500||$2,000-$5,000||$5,000-$10,000|
|Above $10 million||$150,000||$750-$1,875||$1,125-$2,250||$3,000-$7,500||$7,500-$15,000|
Can I obtain this bond if I have problematic finances?
Yes, you can get bonded if your finances are not perfect. Lance Surety Bond runs its Bad Credit Surety Bonds program for applicants with issues such as a low credit score, tax liens, bankruptcies, and civil judgements.
The bonding risk is higher, which makes the rates slightly higher - in the range of 5%-10%. Nevertheless, you can still get bonded at a fair price. This is possible due to our exclusive partnerships with a number of A-rated, T-listed surety companies.
How do I apply for a mortgage broker bond?
Keen on learning the ins and outs of the bonding process? You can consult the extensive guide on our How to Get Bonded page.
For further questions or to get help with your application, just contact us at (877) 514-5146. Our bonding experts will gladly assist you.
What happens if I get a claim against my bond?
You may end up with a bond claim if you fail to follow your legal obligations. A harmed party can seek reimbursement in this way. The maximum sum they can demand is the bond amount that you have posted, which is between $50,000 and $150,000.
According to the bond indemnity agreement that you sign when you get bonded, you are liable for all costs incurred on proven claims. The surety may pay them at first, but you are required to compensate it. Thus, it's best to avoid situations that can give rise to problematic consequences.