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North Carolina Mortgage Servicer Bond
The $150,000 Mortgage Servicer Bond is required by the North Carolina Commissioner of Banks for the protection of consumers against a mortgage servicer’s unlawful actions. The bond is a licensing requirement and must be filed with the Nationwide Multistate Licensing System (NMLS).
Jet offers the lowest prices for the Mortgage Servicer Bond with monthly or yearly payment options to suit your needs! Save on your surety bond now.
What Is the Lowest Price for the Mortgage Servicer Bond?
The cost for a $150,000 Mortgage Servicer Bond starts at $56 monthly or $563 annually. Jet’s rates must be approved by an underwriter who will evaluate personal credit may require addition financial statements. An applicant with preferred credit will be approved for the rates listed in the chart below.
| Bond Limit | Annual |
|---|---|
| Monthly | $56 |
| 1 Year | $563 |
| 2 Years | $984 |
| 3 Years | $1,406 |
Jet never uses brokers or outside agents, allowing us to cut out the middleman, get your bond filed faster, and eliminate commissions and broker fees.
How Does the Mortgage Servicer Bond Get Filed?
The Mortgage Servicer Bond is filed electronically through the NMLS. Jet must be given authorization to create and manage the bond form. After the bond is created, both Jet and the mortgage servicer must approve the bond before submitting it. The NMLS electronic surety bond filing process is explained in the graphic below.
Can I Cancel My Mortgage Servicer Bond and Get a Refund?
Yes, a refund may be applicable upon cancellation with Jet! When you request to cancel your bond, Jet will send the notice of cancellation directly to the Commissioner. The bond will be kept in effect for an additional 90 days by the Commissioner. This extra time on the bond will count towards the time used on the bond and will affect the refund.
Annual or multi-year bonds that are paid for upon issuance can be refunded for any time that is left unused. Jet doesn’t work with other companies, so commissions, broker fees, and minimum earned premium will not be counted against your refund. Jet only withholds the premium for the time that the bond was in effect (including the 90 days held by the Commissioner) and refunds the rest.
Monthly payments plans are not eligible for a refund as the full premium was never paid. Each monthly payment keeps the bond active until cancellation is requested. Since the Commissioner holds the bond for an additional 90 days after the notice of cancellation, you may be required to pay up to three payments for the extra coverage. If the bond is still active after the 90-day period, Jet will stop the monthly payments from coming out of your account at that time.
How Does a Mortgage Servicer Avoid Bond Claims?
The Mortgage Servicer Bond serves the purpose of protecting consumers from losses when a mortgage servicer violates their licensing regulations according to the North Carolina Secure and Fair Enforcement (S.A.F.E.) Mortgage Licensing Act. In addition to the NC S.A.F.E. Act, a mortgage servicer is also obligated to fulfill the duties listed in General Statutes 53-244.110, including but not limited to:
- Safeguarding and keeping record of any money handled for the borrower
- Operating with reasonable skill, diligence, and care
- Filing reports of servicing activities in the state upon request from the Commissioner
- Attempting to resolve or workout delinquencies or defaults with a borrower
Failing to follow general licensing regulations or engaging in the prohibited acts found in General Statutes 53-244.111 can lead to a bond claim. The claim would be filed as a way for a consumer or the Commissioner to receive restitution for losses suffered. Some of a mortgage servicer’s prohibited acts are:
- To unethically influence or attempt to influence a real estate appraisal in connection with a mortgage loan
- Failing to notify a borrower when taking action to place hazard, flood, or homeowner’s insurance on a mortgaged property or placing such insurance when having knowledge that the insurance is already in effect
- Placing insurance on a mortgaged property in an amount greater than the insurable improvements or the last known coverage amount of insurance
- The Commissioner may suspend or revoke the license of or impose civil penalties onto a mortgage servicer who is found in violation of licensing rules and regulations. It is in the best interest of the mortgage servicer to abide by the NC S.A.F.E. Mortgage Licensing Act to avoid license complications, penalties, and bond claims.
What Happens If I Get a Bond Claim?
If you receive a claim against your Mortgage Servicer Bond, Jet will work on your behalf to check the validity of the claim. An investigation will be opened to give you and the claimant an opportunity to provide evidence. If the investigation concludes with a legitimate claim, Jet will pay the claimant in the amount of the claim, up to the full limit of the bond. Jet will notify the Commissioner within ten (10) days of any bond claim payout. You are still responsible for paying Jet back in the amount of the claim to reinstate the full coverage of the bond within thirty (30) days.
The Commissioner also has the authority to collect from the bond thirty (30) days after the due date for any unpaid penalties or monies. If a claim is filed by the Commissioner for failure to pay due monies, Jet is obligated to automatically pay the Commissioner on your behalf. You are still required to pay Jet back within thirty days as any other bond claim payout, since you are responsible for your actions as a mortgage servicer.
Why Is the Mortgage Servicer Bond Required by the Commissioner of Banks?
The Mortgage Servicer Bond is required to guarantee that if consumers suffer losses from the failure of a mortgage servicer following licensing regulations, the consumer will be reimbursed accordingly. The Commissioner of Banks exists to regulate mortgage servicer licenses and bonds, as well as other mortgage and trust companies. By monitoring licensees, the Commissioner ensures that the public is protected from any fraud or deceptive practices
How Does the Application Process Work With Jet?
Applying for a Mortgage Servicer Bond is simple with Jet! Our online application will take you through a step-by-step process that takes less than five minutes. A Jet underwriter will review the application and provide you with an approved rate. Jet never uses outside agents or brokers and is not subject to waiting for other companies to provide rates. After a quick review, Jet will notify you with a rate that is ready to purchase right away.
How to Renew the Mortgage Servicer Bond
When it is time to renew your Mortgage Servicer Bond, Jet will send you a notice electronically and through the mail. It only takes a minute to fill out the renewal notice and pay the renewal premium. Online renewals will instantly continue your bond coverage; mailed renewals may take a few days for Jet to receive and process the completed notices.
If you make monthly payments for your Mortgage Servicer Bond, there is no renewal process. Every time a payment comes out of your account, it keeps your bond in effect for another month.
Does the Mortgage Servicer Bond Expire?
No, the Mortgage Servicer Bond is continuous until cancelled. However, the bond can be cancelled when it is no longer needed or if Jet has not received payment for the coverage given by the bond.
Are There Other Bonds That a North Carolina Mortgage Servicer Needs?
In North Carolina, a mortgage lender can carry out the functions of a mortgage servicer within their licensing activities. A Mortgage Lender Bond will satisfy the coverage for a mortgage lender that also offers services as a mortgage broker and servicer.
If you are in need of further details on the mortgage industry, licensure processes in multiple states, and applicable surety bond regulations, take a look at Jet’s comprehensive Mortgage License Bonds Guide.
