The $100,000 Reverse Mortgage Lender Bond is required to be held by mortgage lenders that are certified to reverse mortgage loans by the North Carolina Commissioner of Banks. The bond serves the purpose of protecting elderly homeowners who enroll in a reverse mortgage transaction.
With Jet, applying for a Reverse Mortgage Lender Bond is easy and quick! Jet operates as a direct insurance company - we don’t charge you unfair broker or shipping fees.
The cost of a $100,000 Reverse Mortgage Lender Bond starts as low as $50 per month or $500 per year. Rates must be approved by an underwriter who will evaluate business and personal information, including a soft credit check. The chart below illustrates rates that would be offered for an applicant with preferred credit.
Jet offers several payment options to best fit your needs. A monthly payment plan (exclusive to Jet) will keep your bond running as each payment is made. Bonds can also be purchased by yearly or multi-year terms for less frequent payments.
An original Reverse Mortgage Lender Bond must be submitted to the Commissioner of Banks. Once payment is made, Jet will complete the bond form with a surety seal and signature and mail it to you free of charge. When you receive the bond, you will need to sign it and have another person attest to the signature. When the bond is complete, it must be mailed to the Commissioner at the following address:
Office of the Commissioner of Banks
4309 Mail Service Center
Raleigh, NC 27699-4309
Yes! Jet will refund a prepaid Reverse Mortgage Lender Bond upon cancellation. If you purchased an annual or multi-year term, Jet will notify the Commissioner right away and calculate your refund. The Commissioner keeps the bond in effect for an additional 90 days, which will be added to the time used on your bond. Jet’s calculation is based only on the time used on the bond versus the time left unused and never holds onto commissions or broker fees from your refund.
If you are part of a monthly payment plan, there is no refund available. Each payment that is made pays for the next month’s coverage. Once cancellation is requested, the Commissioner holds the bond in effect for an additional 90 days. Up to three payments may be required to account for the liability while the bond is still in effect, and the payments will stop following the 90-day period.
The best way to avoid claims on a Reverse Mortgage Lender Bond is to follow licensing regulations and conduct business ethically. Reverse mortgages are offered by authorized mortgage lenders, who must follow the provisions of the NC Secure and Fair Enforcement (S.A.F.E.) Mortgage Licensing Act as well as the Reverse Mortgage Act (RMA). The faithful performance of a reverse mortgage lender under these rules and regulations prevents fraud, dishonesty, and misrepresentation that could harm the borrower(s) of the mortgage loan. Since a reverse mortgage loan is used by a borrower who is over 62 years of age for financial assistance, the Commissioner uses the bond to protect these vulnerable individuals from further financial hardship that could be incurred by the reverse mortgage lender.
Under the General Statutes 53-270, a reverse mortgage lender who makes, services, or collects a reverse mortgage loan is prohibited from practices such as:
A borrower that has suffered damages can bring civil action against the reverse mortgage lender for restitution. Claims can be filed against the bond for any of the above violations or any act or practice that is in violation of the NC S.A.F.E. Act or the Reverse Mortgage Act. If the Commissioner finds a mortgage lender who is authorized to issue reverse mortgages in violation of their licensing, the Commissioner will take action in the following order:
A claim can also be filed against the Reverse Mortgage Lender Bond by a borrower to receive restitution or by the Commissioner on behalf of the borrower.
If you receive a claim on your Reverse Mortgage Lender Bond, Jet will begin an investigation into the validity of the claim, collecting evidence from both the claimant and the lender. If the claim is found to be valid, Jet will pay the claimant right away and notify the Commissioner of the payout within ten (10) days. However, because you are responsible for your actions as a lender, you are still obligated to pay Jet back in the amount of the claim within thirty (30) days of the payout to restore the bond.
Additionally, if you are found in violation of the Reverse Mortgage Act and the Commissioner directs you to make payment to a principal or you agree to make payment to a claimant under a consent order, you must make payment by the due date. Failure to pay the monies due will lead to an automatic bond claim, which Jet is obligated to pay within thirty (30) days. Just like any other claim, you are still required to pay Jet back in the amount of the claim to restore your bond to the full amount required by the Commissioner.
The Commissioner of Banks has the purpose of regulating mortgage-related business in North Carolina. One requirement enforced by the Commissioner is the Reverse Mortgage Lender Bond, which is in place to protect those who enter into reverse mortgage loans, usually homeowners aged 62 or older using the reverse mortgage loan to tap into the equity in their homes for financial assistance. Borrowers who are counseled to enter into a reverse mortgage loan are vulnerable financially. Under the Reverse Mortgage Lender Bond, borrowers are protected against financial losses from a mortgage lender’s deceitful or fraudulent actions.
Applying for your Reverse Mortgage Lender Bond is easy with Jet! The application is fully online and will take you through each step to fill out the necessary information. Although the application only takes a few minutes to complete, it must be reviewed by a Jet team member for approval and additional business information may be needed. Once a rate has been approved, Jet will send you a quote that is ready to purchase directly online. The application will address where the bond should be sent for filing with the NC Commissioner of Banks.
When it is time to renew your Reverse Mortgage Lender Bond, Jet will send you a renewal notice through standard mail and email. To renew online, simply click the link in the email you received and provide payment to instantly renew your bond. To renew through the mail, simply fill out the renewal notice with payment information and mail it back to Jet.
For monthly payment plans, a renewal is not required. Every payment that is made will keep your bond running for another month. Jet will automatically collect payment until cancellation is requested.
The Reverse Mortgage Lender Bond must be held by a person or business who is authorized to issue reverse mortgage loans. Authorization can be added to a mortgage lender who is already licensed and holds a Mortgage Lender Bond. If conducting business as a mortgage lender and a reverse mortgage lender, both bonds must be held to protect consumers from financial damages. Unlike the Reverse Mortgage Lender Bond, the Mortgage Lender Bond must be filed through the Nationwide Multistate Licensing System.