Mortgage License Bonds

In nearly every state, mortgage brokers, lenders, servicers, and loan originators require a license and surety bond before they may provide any mortgage-related services to the public.

Whether you work within the mortgage industry in California, Texas, North Carolina, or all of the above, Jet Insurance Company can provide you with the necessary bond (or bonds) efficiently and at a low price.

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Similar to the mortgage industry, the surety process can often be filled with middlemen agents and brokers looking to earn a commission and injecting themselves into the reporting process. Jet has taken a different approach from our peers and acts as a direct surety company. That means you can purchase all your mortgage bonds straight from the source. No extra fees. No wasting your time.

How Much Does a Mortgage License Bond Cost with Jet?

We have found that companies are saving up to $1,500 or more a year on their surety bond needs with Jet Insurance Company! Jet provides savings through our direct approach. Without reliance on agents and brokers who demand commissions, Jet can offer a lower-end price to the mortgage industry.

The cost of a Mortgage Bond is dependent on the bond’s required limit and the personal credit of the mortgage professional (it’s a soft credit check, so no need to worry about it impacting your score). However, prices are only ever a small fraction of the bond amount, regardless of credit. 

Let’s take a look at the California Residential Mortgage Lender/Servicer Bond to give you an idea of what rates are available at Jet. The bond’s limit is based on the aggregate loan amount written by the licensee, and a $50,000 minimum is enforced by the state regulator (this is pretty common regarding custom mortgage broker, lender, and servicer bond amounts). 

If you qualify for the standard $50,000 limit, prices start at $188 for a one-year term, or you can utilize our exclusive subscription plan of $19 a month. For additional rates, take a look at the Jet price chart below.

As for mortgage loan originators, regulated bond limits range from as little as $10,000 to upwards of $250,000—the bond amount is typically based on the total loan volume of the originator. 

For example, the Virginia Mortgage Loan Originator Bond is required to have a minimum limit of $25,000 and, as stated before, is dependent on the overall amount of loans originated by the licensee in question. At Jet, prices kick off at $94 for a one-year bond term, or a convenient $9 a month. 

For further details regarding bond limits and the price tiers available, review the following chart. 

Currently, Jet is the only surety carrier to offer a monthly option for the mortgage industry. You can avoid large surety totals hitting all at once and spread the cost over the year.

Jet also offers discounted multi-year bond terms if you are interested in more of a “pay now and not think about this state-regulated requirement for the next two or three years” kind of thing. 

The amount or limit of each surety bond is regulated at the state level, so some understanding of the licensing requirements within your operating state is necessary. For further details select the state or states you are doing business in at the bottom of the page. 

How to Apply for a Mortgage License Bond With Jet 

Jet’s application for any of the Mortgage License Bonds can be completed with just a few clicks. To get started, select the “Quote” button below, or you're welcome to give us a call at (855) 296-2663 and one of our Jet team members can begin the application process with you (no callbots here). 

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Once you've selected your required mortgage bond, some basic information will be required such as your contact details and social security number for a soft credit check—please be sure to input your current license details as your surety bond must contain the same exact info to be appropriately filed. 

In nearly all cases you will receive an instant quote that can be purchased online. In some rare scenarios, a Jet underwriter might conduct a more thorough review of your application if you are seeking a larger bond limit or if minimum requirements are not met.

Once you receive your approved rate options, simply choose the best payment option for you (i.e. monthly, annual, or multi-year) and purchase your bond. You'll receive a copy of your receipt and bond form as soon as this last step has been fulfilled.

How Is a Mortgage License Bond Filed? 

The Nationwide Multistate Licensing System and Registry (NMLS) is in charge of the administration of all mortgage licenses and the filing of corresponding surety bonds. This means that once you have purchased your bond with Jet, it must then be submitted to the NMLS for filing. 

Luckily, Jet’s team has a ton of experience with the NMLS. All you’ll need to do is grant Jet permission to act as your designated surety company (Jet Insurance Company NAIC #16379) so that we may file the bond as soon as possible—further instructions on how to do this can be found on the Electronic Surety Bond for Licensees webpage. 

Once the bond has been officially filed with the NMLS, you can contact us via phone or email ([email protected]) to make necessary changes to the bond at any time.

For easy reference, the Jet team has created a thorough outline of the NMLS bond filing process in the graphic below.

If you are in need of further licensing info and application details, you can find more resources on the NMLS State Licensing webpage. Simply click on the map and select your applicable state. 

Who Needs a Mortgage License Bond?

The four most common mortgage license types that utilize the financial guarantee of a Mortgage License Bond are listed below with a brief description of what each license entails.

Mortgage Broker - Brokers are meant to bridge the gap between borrowers and lenders. They connect the two parties, negotiate terms, and gather all the necessary paperwork to be submitted to the lender for underwriting/approval purposes. It’s important to note that brokers do not use their own funds to originate mortgages.

Mortgage Lender - Lenders are the ones who provide the funds that finance the borrower’s mortgage. This is done with the assumption that the money borrowed will be paid back to the lender, of course. 

Mortgage Servicer - Servicers do exactly what it sounds like—they provide all the day-to-day tasks for managing a borrower's loan such as sending out mortgage statements and processing payments on the loan. 

Mortgage Loan Originator - An MLO can be an individual or an institution and is often referred to as the original mortgage lender. To put it simply, they are either the person that originates a borrower’s loan or the institution responsible for funding the loan. 

Why Are Mortgage License Bonds Required? 

If you work within the mortgage industry and are checking off the many boxes it takes to do so (i.e. education courses, testing, licensure paperwork, fees, surety bonds, etc.), you’re also likely aware of why so much is required of you to work in the profession. Money.

One of the hoops you have to jump through is that you must acquire an applicable surety bond in order to maintain a license. However, the Mortgage License Bond is not necessarily just some annoying state requirement that you must meet. It does have a purpose. At the bare minimum, it provides a legal assurance to the state regulator that you will meet the standards of your license, as well as uphold your state’s mortgage regulations. 

But, most importantly, it ensures that compensation is available to any damaged party (e.g. a customer or even the state regulator themselves) should you fail to comply with the laws surrounding your license as a mortgage broker, lender, servicer, or loan originator. A third-party surety company (Jet) has promised, via the surety bond form, to make timely payment providing recompense to damaged parties. This guarantee gives regulators additional comfort that the constituents they protect will be financially safeguarded and all they have to do is make sure the bond is filed with the NMLS.

How Does a Licensee Avoid Mortgage Bond Claims? What Happens If an Official Bond Claim Is Filed?

Mortgage laws and regulations are different in each state, so it’s up to you to become familiar with the ones that pertain to your specific license, but the most common violations can be found listed below:

• False or misleading advertising
• Engaging in unfair or deceptive practices
• Charging fees for services not provided
• Knowingly providing inaccurate information
• Failure to maintain books and/or records

In general, acts of negligence, dishonesty, misrepresentation, concealment of material facts, and fraud are all license violations that can lead to a bond claim. These are perils that are excluded from insurance policies, such as Error and Omissions coverage, and that gap is covered by a surety bond.

Before getting to the point of an official claim, a consumer complaint is typically filed with your state regulator, who will then conduct an investigation into its validity. Frivolous complaints are thrown out, while well-founded violations may go through some kind of hearing process (or the licensee may simply be ordered to resolve the matter). If the violation remains unresolved, a bond claim is bound to happen.

Once you have word that a claim has been officially filed, getting in contact with Jet should be one of the first things you do. Upon notice, the Jet team will begin its own investigation into the original complaint, as well as review any available documents and details of the state regulator’s hearing/penalty process. 

If a claim is proven to be accurate, Jet will proceed to pay the claimant up to the bond’s limit (claim payments are never to exceed the amount of the bond). As is common in the surety industry, the mortgage licensee is liable for reimbursing Jet for the paid-out claim. Failure to do so will result in difficulties in obtaining a new surety bond, which means you won’t qualify for a mortgage license in any state. Surety bonds are different from insurance policies for this reason, as they still pay the damaged party, surety bond claims must be paid back by the holder of the bond in full. 

For a more detailed explanation of what can cause a bond claim and Jet’s claim process, take a look at the Mortgage License Bond Claims Guide. 

Your Mortgage License Bond Is Active, Now What?

If you wish to continue pursuing a career as a mortgage professional, you’ll need to renew your surety bond at the end of each term. In most cases, your bond form will say something like “continuous until cancelled”, or the applicable regulations will state that a “continuation certificate” is required. Thankfully, there’s no need to stress about what that means as Jet will send over a renewal reminder via email and standard mail prior to the expiration of your bond term.

For those who choose Jet’s monthly payment option, renewing a Mortgage License Bond is not something that even needs to cross your mind. Your bond will remain active with each recurring payment or until cancellation is officially requested. 

You may cancel your surety bond with Jet at any time. Simply send a request to [email protected] and, once received, the Jet team will send an official cancellation notice to the appropriate regulatory agency or state department. 

When it comes to Mortgage License Bonds, cancellation periods range from 30 to 90 days and act as an extension of liability to protect the public. Once the required cancellation period has expired, your bond will be released from liability. 

If you do not file a new surety bond with the NMLS within a certain amount of time (typically 30 days), your license will be suspended and/or revoked by the government entity that originally issued your mortgage license.

It is important to note that most mortgage licenses expire on December 31st of each year, so be sure to pay attention to your state’s licensing dates. 

Mortgage License Bond Requirements by State

If you are looking for your exact mortgage bond, and all the information that goes with it, select your state from the map below.